The North and Population Aging

The 2011 Census results for population age are out from Statistics Canada today and Canada is indeed a much older place than the last census in 2006.  The proportion of population aged 65 and over is now 14.8 percent, up from 13.7 percent in 2006.  The results for Northern Ontario suggest that the North is older than Canada as a whole.  A ranking of Canadian CMAs (Census Metropolitan areas) and Northern Ontario CMAs and CAs (Census agglomerations) show the Sault is the oldest major city in the North with 19.3 percent of its population aged 65 years and older.  Thunder Bay is next at 17.2 percent followed by North Bay at 17 percent.  Sudbury is next at 16.1 percent with Timmins the youngest at only 13.8 percent.  For Canada's CMAs as a whole, the oldest is Peterborough at 19.5 percent and the youngest is Calgary at 9.8 percent.  Indeed, Calgary, Edmonton and Saskatoon, out in the booming west with its influx of young migrants - are the three CMAs with the lowest share of population aged 65 and over.  Additional note, I've left Elliot Lake (a northern CA) off of this graph.  Its proportion of population aged 65 and over is 35.1 percent but then it has become a retirement community.

Dissecting Drummond

Well, the Drummond Report (a.k.a. The Commission on the Reform of Ontario’s Public Services) is finally out and it is indeed a weighty tome.  It is encyclopedic in its scope and details hundreds of recommendations.  Despite it being described as gloomy, I thought that it was actually a relatively optimistic document.  While Ontarians have to come to grips with a diminished economy and diminished fiscal state, as the report writes: “By current international standards, Ontario’s debt is still relatively small.  We are a very long way from the dreadful fiscal condition of countries that have dominated the news in the past two years.”  This reinforces my prior view that the report is in many ways a bogeyman designed to scare Ontarians before a relatively more modest program of expenditure restraint is introduced in the spring Ontario budget.

There is a lot of material here but a preliminary scan suggests the report has some very interesting and useful ideas – some of which will not be palatable to the government.  Health and education get off relatively lightly in that they are recommended to have nominal if small expenditure increases.  

With respect to Northern Ontario, the Drummond Report is rather impressive in its grasp of the significance of various aspects of Northern economic development.  The following points in particular extracted from the Drummond Report:

Ring of Fire: This development of major mineral deposits in northern Ontario offers the prospect of substantial socio-economic opportunities for all northern residents, particularly Aboriginal Peoples. The government should collaborate with Aboriginals, industry and the federal government to maximize these opportunities.

Recommendation 9-8: Develop a labour-market policy framework to link planning for employment and training services more strongly to economic development initiatives led by ministries such as Economic Development and Innovation; Agriculture, Food and Rural Affairs; and Northern Development and Mines.

Ring of Fire

The Ring of Fire development in northern Ontario represents a significant opportunity to both realize major mineral development in the region and improve socio-economic opportunity and quality of life for Aboriginal People and other residents of the north. Managed properly, the project will provide benefits over several decades.  Success in the Ring of Fire will require collaboration between Aboriginal People, industry, and the federal and provincial governments. With a focus on creating a healthy workforce, education and skills training, and basic community infrastructure, the government should take innovative approaches to expand labour-market and training programs for First Nations communities. This approach would include implementing a full range of employment programs and related social supports that are available through social assistance for recipients living on reserve. These include education programs, job-specific training, literacy programs and programs that support young parents. The Commission is optimistic that industry partners will employ Aboriginal People throughout the life of the Ring of Fire and work as partners with government to deliver or fund (perhaps both) the employment and training services required. If voluntary efforts by the business sector lag, the government should consider putting a levy on mining-related activities to directly fund initiatives that will prepare Aboriginal People to participate economically in the Ring of Fire.

All in all, this is not bad news for the north.  The specific focus on the Ring of Fire and its potential benefits for Aboriginal peoples will hopefully provide an impetus for the provincial government to pursue this region as an investment frontier for the entire province.  The Drummond Report also mentions regional gas tax revenues, which suggests that he may be more inclined towards devolution in his perspectives than the Ontario government as a whole.  After all, if you can have regional gas tax revenues, why not regional resource revenue retention?  As for the Northern Ontario Heritage Fund, there is no specific mention of what should be done with it.  However, while the report is critical of business subsidies, it recommends that future policy should refocus the mandate of business support programs from job creation to productivity growth in the private sector. Refocusing the NOHF to productivity investments is not a bad thing. 

Northern Growth: Adding Up the Successes

Well, the provincial government has not forgotten about the Northern Growth Plan after all.  It would appear that planning for the plan to plan all plans is still being planned.  This morning's opinion piece in the Thunder Bay Chronicle-Journal by Northern Development and Mines Minister Rick Bartolucci "Consensus in the North: The arithmetic of success" was no doubt designed to provide a quantitative bent to the government's activities not by listing the investments it was planning to make in Northern infrastructure or documenting the size of the budget for new projects but by listing the number of consultations and their participants.

Indeed, according to the Minister:"When it comes to consulting, listening and collaborating with northerners, the McGuinty government is also ahead of the curve."  The provincial government is working with northerners "to create two regional economic development planning pilots in Northern Ontario".  The Northwest Joint Taskforce has posted their draft online and according to the Minister "The local planning teams will be inviting your input on their proposed approach.  This is a time for us to work together on a made-in-the-North solution, and I urge you to participate." And finally, "I encourage you to keep contributing your advice and ideas for increasing prosperity in Northern Ontario."

What would be a more interesting pursuit by the Minister is not asking what we think about the Northwest Joint Task Force draft framework but what he or perhaps the MNDM Deputy Minister or perhaps Cabinet thinks of it. What the Minister is outlining is yet another set of consultations on a plan devised in response to a plan and whose implementation ultimately requires approval and action on the part of the government.  Unless of course, by asking our views yet again on a proposal, the minister plans to finally base his decision on what we want. Is the Minister gradually moving towards a view of more regional autonomy for the North?  Otherwise, all of this is simply another exercise is Northern economic development arithmetic in which the squared sum of the time spent consulting Northerners plus the number of ministerial announcements on progress in planning is equal to zero.

2011 Census Results for Population In: Northern Ontario Declines

Statistics Canada released the first set of 2011 census results today dealing with population and dwelling counts.  Canada's population is up 5.9 percent from 2006, Ontario's is up 5.7 percent while within Ontario, the North is down overall by 1.4 percent.  As the accompanying table shows, the Northeast stayed stable in terms of its overall population while the Northwest showed a decline of 4.7 percent.  As for the major urban centers of the North, Greater Sudbury posted a 1.6 percent increase, North Bay a 1 percent increase, and Timmins a 0.4 percent increase.  The Sault and Thunder Bay both saw declines in their populations of -0.4 and -1.1 respectively.

The Northwest during the period 2006 to 2011 worked its way through the aftermath of the forest sector crisis with the region outside of Thunder Bay bearing the brunt of the employment and population adjustment.  Employment and GDP in Thunder Bay shrank by about 10 percent during the forest sector crisis and its population has been remarkably resilient given the decline.  Employment in the region outside of Thunder Bay shrank by almost 30 percent.  Employment numbers over the last year have been showing increases in Thunder Bay and the Northwest and these population results are hopefully a lagging indicator.  The Northeast has been buoyed by its mining sector though there is a redistribution of population towards the major urban centers.  Evidence from the Northeast suggests that should the Ring of Fire mining development successfully proceed, the Northwest can also expect to see stabilization and even some growth in its population.

What will be interesting is the additional sub-regional breakdowns in population with the Northeast and the Northwest.  For example, between 2001 and 2006, while the Northwest declined in population, the Kenora District actually saw increasing population.  As well, the aboriginal population increased substantially in the Northwest between 2001 and 2006.  Further results and analysis on whether these trends have continued since 2006 to come.

Investment Activity and Trends in Northern Ontario: Part Three – Thunder Bay and Sudbury

In this third installment on investment activity in Northern Ontario as illustrated by building permit data, I am going to focus on the roles of Thunder Bay and Sudbury.  These are the two largest urban centres in Northern Ontario with CMA populations of 122,000 and 158,000 respectively accounting for about 38 percent of Northern Ontario’s population of 745,000.  As the largest urban nodes, one would expect them to be major drivers of economic activity and new investment and the data suggests that they are indeed major economic contributors but are not exactly punching much above their population weight.

Figure 1 shows the total nominal value of building permits (and the linear trends) issued in Thunder Bay and Greater Sudbury over a 20-year period and reveal that Thunder Bay has stayed relatively flat over this period whereas Sudbury enjoyed a pronounced boom from 2003 to 2009 but has since cooled off somewhat.  More interesting is Figure 2, which plots Sudbury’s share of Northeastern Ontario’s permits, Thunder Bay’s share of the Northwest’s permits and then their combined share of all of Northern Ontario.  On average, over the period 1989-2011, Greater Sudbury has accounted for about 34 percent of all building permit values in the Northeast and Thunder Bay for about 60 percent of the values in the Northwest.  Both of these are in line with their respective population shares with Thunder Bay somewhat more dominant in its region and together they account for an average of about 41 percent of Northern Ontario’s building permit activity.  This share has been trending down slightly over the period 1989-2011 generally as a result of weaker performance by Thunder Bay given that the trend for Sudbury has been pretty constant.

While Thunder Bay and Sudbury are important economic drivers for the region, these results suggest that they are not overly dominant and that new investment activity is dispersed throughout Northern Ontario.  The other towns and cities of the North – particularly Sault Ste. Marie, Timmins and North Bay – are also important drivers.  Thunder Bay and Sudbury’s share of new investment activity in Northern Ontario is approximately the same as their combined population share of the region.

Investment Activity and Trends in Northern Ontario: Part Two

In the first installment of this series on investment activity in Northern Ontario as measured by building permit data, we saw that building permit values in the north have ebbed and flowed with an overall flat performance over a 35-year period.  In this installment, I want to compare Northeastern and Northwestern Ontario in two ways: first, comparing their long-term trends in the real value of permits and second, comparing the composition of building permits across the categories on residential, industrial, commercial and institutional/governmental.

Figure 1 plots the real total value of building permits and while the ebb and flow of activity is there, the long term trends as depicted by the linear trend are markedly different across the two regions.  The Northeast exhibits a rising trend which albeit weak is infinitely preferable to the long term decline exhibited by the Northwest trend line.  Figures 2 and 3 plot the composition of the permits in 1976 and in 2011.  In 1976, the Northwest has a larger share of industrial permit activity compared to the Northeast while both had comparable shares of residential activity.  Compared to 1976, 2011 shows a decline in the residential shares of permit activity in both regions as well as an increase in the share of institutional and governmental permits.  In 1976, the public sector accounted for 8 and 5 percent of investment activity respectively in Northeastern and Northwestern Ontario.  By 2011, those shares had risen to 21 and 12 percent respectively.  It would appear the Northeast has been able to secure more public sector investment than the Northwest.

The industrial share has declined in both regions but it is surprisingly still quite high in the Northwest - perhaps an indicator of the recent surge of activity in the Ring of Fire.  The residential share has declined in both and indeed a big driver of the flat performance overall in new investment over 35 years has been the weak residential sector.  Both regions show an overall downward trend in the real value of their residential permits over the 1976-2011 period though the northeast has shown some recovery since 2000.

Figure 1

Figure 2

Figure 3