Northern Economist 2.0

Monday, 24 July 2017

Port Activity in Thunder Bay: A Retrospective

Thunder Bay's economic development hinged on its role as a transportation hub and its port was integral to that.  From the early days of the grain trade to the development of the massive elevators that still mark its waterfront, Thunder Bay was vital to the development of the Canadian wheat economy.  At its peak, over thirty grain elevators lined the waterfront in Thunder Bay and it was the largest grain port in the world.  Thunder Bay's port underwent a decline in the 1980s as a result of shifts in global grain markets that persisted  into the early 21st century but recent years have seen a resurgence of both the grain trade and the port.  Indeed, there is new life in the entire St. Lawrence Seaway as a recent piece in the Globe and Mail noted that 2017 has seen a 20 percent increase in freight movement driven by iron ore and grain shipping.

Monday, 17 July 2017

Economic News Around the North: July 17th Edition

Well, a number of interesting items have come to my attention with respect to stories with an economic impact on northern Ontario.  However, it is summer and peak travel season so I think I will keep things short and a bit more eclectic than usual, but with a tourism focus.

To start off, it would appear that tourism efforts in White River, Ontario may be all for naught given the reaction of the Chinese government to Winnie the Pooh.  According to a BBC story, Winnie the Pooh is being blocked in China because images of Pooh are being used to represent China's President Xi Jinping in social commentary and criticism. 

Winnie-the-Pooh may be the world's most beloved bear but apparently the love stops in Beijing where government censors cannot "bear" the images.  White River has of course gone to great lengths to market its link to the character and everyone who has driven the highway has invariably stopped at the roadside statue of the Pooh.


No doubt, White River and its citizens will now join the list of subversive elements being monitored by the Chinese government and the Pooh Hometown Festival held the third week of August will acquire new cachet and international significance.  Mark August 18th down in your travel calendar.

In other northern news stories with some relation to tourism and the economics of tourism and travel:

Thunder Bay's Hotel Boom shows no sign of slowing. Northern Ontario Business. July 12th, 2017.

Sudbury Casino would drain economy: report. June 27th, 2017.

Thunder Bay Tops Best Places to Live in Northern Ontario. Tbnewswatch. July 6th, 2017.

Well, given Thunder Bay's recent spate of bad news, the above ranking by MoneySense qualifies as good news though the story does qualify the ranking by noting that nevertheless, Thunder Bay barely makes the top 100 ranking only 97th overall (out of 400).

Summer is also the season of festivals and events and the economic impact of these festivals is important.

Few weeks before festival financial picture is clear: Mayor. Timmins July 5th, 2017.

Temiskaming Shores first-ever craft beer festival already sold out. CBC News Sudbury. July 11th, 2017.

Sturgeon Falls festival serves up Rock 'n Ribs. July 16th, 2017.

And if you are in Thunder Bay and at Hillcrest Park on Thursday evenings, there is always the MacGillivray Pipe Band which is celebrating its 100th anniversary this year.

And speaking of MacGillivray, what would William MacGillivray (b. 1764, d. 1825; Chief Director of the Northwest Company) who managed a commercial fur trade empire that extended A Mare usque ad Mare and after whom Fort William, the inland headquarters of the Northwest Company was named, think of this?

Have a great week!

Wednesday, 12 July 2017

Thunder Bay's Crisis: Time to Move Forward

Thunder Bay often feels neglected by decision makers in Toronto as well as the national media.  Indeed, it has sometimes been expressed that for Thunder Bay, bad publicity is better than no publicity at all as it draws attention to its needs. I disagree and am more disposed to the adage that no news is good news.  Thunder Bay has been making the national media all too often over the last few months and the attention is not favorable.  One really has to wonder why community leaders in Thunder Bay have not been expressing more concern about the issues spanning indigenous relations, institutional problems and social issues given the waves of negative attention.

One only has to take a look at the Toronto Star to see the spotlight that has been focused on Thunder Bay.  Indeed, many issues appear to be getting more attention in Toronto and the national press than in Thunder Bay itself.  The ultimate economic spillover on our community in terms of its potential as a good place to invest and do business is in serious danger.   This is not good for the community and if you think I am exaggerating the potential negative long-term impact that this could have on the city's image and ultimately its economy, take a look at the list of stories that have appeared in the Toronto Star since early May.  If you were an investor planning to open a business in Thunder Bay, a tourist thinking of visiting or a student planning to attend the university or college, how would you react to the following list of stories that mention Thunder Bay - just from the Toronto Star?

Sunday, 9 July 2017

Economic Forecasts and the Impact on Northern Ontario's Economy: Overview and Assessment

Northern Ontario’s economy, with its traditional reliance on transportation and resource sector activities in the end relies on the international economy as a source of demand for its products.  With that in mind, it is helpful to see what the latest forecasts are for the world economy and the potential impact on northern Ontario.  FocusEconomics – headquartered in Barcelona – is a major international economic research and forecasting company that provides data and analysis on international economic indicators and produces economic forecasts and reports. It covers 127 countries, 12 global regions and 33 commodities.  It recently released its July 2017 Consensus Forecast for major economies.

Tuesday, 4 July 2017

Airships to the Ring of Fire

One of the hurdles to the economic development of the chromite deposits in northern Ontario's Ring of Fire (along with commodity prices and complex negotiations with First Nations) is transportation access to the remote and geographically challenging region.  While there has been talk of road and rail access, both of these options are quite expensive.  Well, from the pages of the Winnipeg Fee Press comes an editorial that makes the case for an alternate approach -airships.  An editorial in the July 3rd edition highlights the work of University of Manitoba professor Barry Prentice who has invested years of his time (and had to deal with some major challenges) in developing an airship prototype.

The Winnipeg Free Press editorial notes that the precedent for northern access using airships is being pursued in northern Quebec where a Quebec Company called Quest Rare Minerals is planning to use a fleet of seven Lockheed airships to transport supplies to its Strange Lake mine near Labrador as well as then carry out the ore.  Needless to say, the applicability of the concept to transport in northern Ontario's Ring of Fire is obvious and I have made the case before.  Even the House of Commons has apparently thought airships to access the north was an idea worth exploring.  The case seems even more compelling now given the increasing fragility of winter ice roads in getting supplies into the north.  The First Nations have also noted the possibility of airships as a potential approach as this piece by Chief Elizabeth Atlookan notes. Is this an idea whose time has finally come?

Tuesday, 27 June 2017

A Tale of Two Revenue Sources: The LCBO & OLG

With the aversion of a strike by Ontario’s LCBO workers, most of us will probably turn our thoughts to immersion in our favorite beverage as we move into the Canada Day long weekend.  What the recent dispute should also spark is some introspection regarding the special importance of Ontario’s crown corporations – namely the Liquor Control Board of Ontario (LCBO) and the Ontario Lottery and Gaming Corporation (OLG) – as sources of Ontario government revenue.

Sunday, 25 June 2017

Economic News Around the North: June 25th Edition

Well, I have returned from a rather lengthy set of travels.  My trip home was via the scenic Highway 17 drive through Sudbury, the Sault and around the north shore of Superior to Thunder Bay. There is nothing quite like this drive in terms of the vastness of the land and the vistas of rocks, trees and highway.  I had not done this drive in a number of years and perhaps because of the extra rain this year the landscape seemed a lot greener than I remembered it. The video link here shows a bridge crossing along the way (I was in the passenger seat doing the filming for those of you who might be concerned about my safety).  Nevertheless, here are some of the economic news items that have caught my interest.

Well, there were a number of not so flattering stories dealing with Thunder Bay in the national media over the last few weeks but the economic news was somewhat more upbeat.

$23M from Ontario government for school upgrades. CBC Thunder Bay. June 19th, 2017.

Thunder Bay Sears Location to Remain Open. Tbnewswatch. June 22nd, 2017.

Thunder Centre shopping area to be sold to new owner. CBC Thunder Bay June 19th, 2017. 

The Thunder Centre has got a new owner and despite Sears Canada's financial woes, the Thunder Bay store at Intercity Mall is to remain open - at least for now.  Sudbury and The Sault were not as lucky.  North Bay's store is also not closing.

As for the new school construction, it comes at the cost of some closures - rule of thumb in Thunder Bay based on this story is close three old schools to get one new one.  While closing schools is one way of generating some new construction activity, in the end, there are only so many schools that can be closed.  Eventually, to get new schools we will have to do it the old fashioned way - boost enrollment.  Other northern Ontario cities also seem marked by the dynamic of out with the old and in with the new.  In the Sault, the original St. Mary's College was demolished to make way for a new elementary school. One wonders when this dynamic will hit the school boards in Toronto. Curious to see when they will knock down stately old Jarvis Collegiate or UTS in order to build a shiny new building.

Also, in Thunder Bay tourism news, the decommissioned icebreaker Alexander Henry has left Kingston Ontario and is set to return to Thunder Bay to serve as a transportation museum on the waterfront. 

In Sudbury, there seem to be a lot of projects coming to a head with respect to community infrastructure.  A key debate is where to build the new sports arena - downtown or outwards.

Sudbury at a crossroads: build downtown or build outwards? TVO. June 23, 2017.

True north wants to convert downtown arena into arts centre. CBC Sudury. June 22, 2017.

Rainbow Centre makes pitch for Sudbury library, art gallery. CBC Sudbury. June 23rd, 2017.

New Casino in Sudbury depends on where city builds new arena. CBC Sudbury. June 14th, 2014.

In other potential infrastructure news from a natural resource perspective:

Noront looks for smelter landing spots in Sudbury, Timmins. Northern Ontario Business. June 20th, 2017.

New gold mine in Timmins by 2018: Gowest CEO. June 4th, 2017.

In other news, North Bay's housing market is still doing well according to this source

Meanwhile, for those of you that missed this, the June 1st provincial byelection in Sault Ste. Marie for the seat vacated by Liberal David Orazietti was won by a Conservative for the first time since 1981.  A sign of things to come? Hard to say.  The election is still officially a year away (though one might see a snap election called in the fall if the governing party feels confident) and alot can happen in a year. Stay tuned.

Thursday, 15 June 2017

Thunder Bay Taxis Stories: The High Cost of Cabs

Well, trying to take a taxi in Thunder Bay can be a bit of a challenge.  Several winters ago, a couple of hours before our flight out we called for a cab and it just did not seem to be arriving.  In the end, we had to drive and park our own vehicle at the airport which had not been our original intention. When we discussed the matter with the company, they mentioned it was mid-afternoon and a lot of their cabs were on “school runs” so it would be best to call the night before to book a cab to ensure a ride.  It turns out a lot of the business for cab companies in Thunder Bay is from the broader public sector – schools, social agencies etc…which limits their incentive to provide more and more  immediate availability for private sector clients. 

Friday, 9 June 2017

Economic News Around the North: June 9th Edition

Here are the stories over the last little while that I feel are of economic importance to northern Ontario.  Summer is on the way and there is a definite slowdown in defining economic news as everyone starts heading out to camp for the summer. Tourism is going to be a sector of continuing importance to northern Ontario and camp development should be part of tourism development and infrastructure.  Making more camp/cottage lots available for development would certainly be one way of adding to tourism in northern Ontario.
Here is another piece of tourism infrastructure along the north shore of Lake Superior.

Lake Superior Water Trail connects explorers to northern Ontario. CBC News. Sudbury, June 9, 2017.

Of course, tourism development does not always have positive benefits for everyone as this historical example of northern Ontario tourism exploitation illustrates.

Speaking of infrastructure, there is a glitch in the US Soo locks rebuild.  See here.

It was mining day in Thunder Bay recently and there was another mining show in Timmins.  These events are good showcases for the sector.  The Timmins mining exposition was a 3 day event with 400 exhibitors.

Mining Day in Thunder Bay.  Northern Ontario Business. June 1, 2017.

Miners, investors flock to The Big Show. Northern Ontario Business, June 7, 2017.

In terms of developing the northern Ontario economy, another call for some type of tax incentive program from City Council in Sault Ste. Marie.  There was also a harkening back to the Peterson government of the late 1980s with a call more more government office relocation.  I suppose it would not be too tongue-in-cheek to suggest that the Ontario government simply sell all of its land in Toronto - at current sky high prices - use the proceeds to pay off its debt and then relocate the entire Ontario legislature and civil service somewhere in northern Ontario.  Of course the competition among the big 5 northern Ontario cities would be cutthroat so Wawa might have to be the compromise location.  Perhaps they could make the decision as part of a lottery or gaming experience run by OLG.

Of course, if all else fails there is the inevitable fallback to better marketing.  North Bay seems to be going in this direction with its municipal government handing a million dollars to its arms-length municipal economic development agency. 

In northern Ontario institutional news, there is a commission studying provincial ridings and representation in the far part of northern Ontario.  Some think the commission is thinking of splitting the Timmins-James Bay riding in two to provide better representation to indigenous communities. Will be interesting to see what the commission reports back.

Well, that is it for now. Have a great weekend. 

Tuesday, 6 June 2017

Thunder Bay Community Foundation Awards Night 2017

The Thunder Bay Community Foundation held its 2017 Scholarship and Bursary Reception at the Thunder Bay Art Gallery this evening and it was an exciting and very well attended event.

I served on the Foundation Board from 2007 to 2010 and this evening was an opportunity to reconnect with the Foundation and its activities. The Foundation was established in 1971 with a gift from Prue Morton and has gone on to build a substantial endowment that funds a program of community grants including a set of scholarship and bursaries to students from Thunder Bay and tnorthwestern Ontario.  This year, thanks to the generosity of many donors over the years, the Foundation was able to present $66,900 in scholarships and bursaries to students in Thunder Bay and the District of Thunder Bay.  

Congratulations to all of this year's recipients and best wishes for an exciting future! 

Sunday, 4 June 2017

Comparing Homicide Rates: Why Thunder Bay Has a Problem

From a peak reached in the early 1990s, police reported crimes rates in Canada have been on a downward trend.  This is also the case for homicide rates, which have been on a downward trend nationally since the early 1980s.  There is of course variation from year to year in homicide rates so some type of regression smoothing procedure is helpful in establishing what the longer-term trends over time are.  What quickly emerges from an examination of long-term trends is that Thunder Bay followed national trends in homicide rates until the early 21st century but that since then there has been a substantial divergence.  It is not a “northern Ontario” thing because the Greater Sudbury CMA tracks provincial and national homicide rates quite closely.

Figure 1 presents LOWESS Smoothed homicide rates for Canada and major regions from 1981 to 2015.  LOWESS is a particularly useful smoothing tool because it helps deal with “outliers” – that is extreme observations that can often distort averages taken over time. The data source is from Statistics Canada (Table 2530004 - Homicide survey, number and rates (per 100,000 population) of homicide victims, by census metropolitan area (CMA), annually).  Canada as a whole has seen a steady decline in homicide rates going from smoothed values of 2.74 per 100,000 in 1981 to 1.51 by 2015 – a drop of 45 percent.  This decline is a feature of the West, Ontario, Quebec and Atlantic Canada though Atlantic Canada sees a sight upturn after 2006.  In terms of regional rankings, homicide rates are now the highest in the West, followed by Atlantic Canada, then Ontario and finally Quebec.

Friday, 26 May 2017

Economic News Around the North: May 26th Edition

It has been a slow start to spring across northern Ontario but temperatures are finally starting to warm up.  Environment Canada says warmer weather is on its way.  Here are a few of the stories of economic significance for northern Ontario that caught my attention over the last week or so.

Regarding the Ring of Fire, here is an op-ed by Heather Hall and Ken Coates that essentially makes the point that ultimately, the Ring of Fire will not proceed "without substantial, clear and significant indigenous engagement." In the end as any good economic historian knows, institutional arrangements are important.

How to finally ignite Ontario's Ring of Fire. Chronicle-Journal, May 23rd, 2017.

Given this op-ed, selling yourself as a Ring of fire smelter location may be premature. I am also surprised that in this age of heightened sensibilities and sensitivities one is actually using the term 'smelter' and not something like "Value Added Mineral Processing and Community Economic Enhancement Facility".

Northern Ontario cities try to 'sell' themselves as best place to put Ring of Fire smelter. CBC News Sudbury. May 15th, 2017.

Nevertheless, there is no stopping the sense of optimism when it comes to the Ring of Fire especially in the run up to a provincial election.

Premier repeats Ring of Fire Optimism in Timmins. Sudbury Star, May 26th, 2017.

Sadly, given the presence of the Premier in northern Ontario, there was no reaction in northern Ontario to this item (by yours truly) which Dominic Giroux on Twitter noted as a "blunt assessment".  I think this provides support for a case for a government program to provide northern Ontario media organizations with research support as they are probably stretched for resources in pursuing stories.  This is not that far-fetched given the unfortunate downsizing that has occurred over the years in local media that I am aware of.

When it comes to economic development, human capital is also important and of course education is a key component of any human capital strategy.  Providing government services in northern Ontario is already a challenge given the low population density and geographic dispersion.  Doing so in rural northern Ontario even more so.

'Very frustrating, kind of heartbreaking': Seeking support for northern Ontario rural school,"CBC News, Sudbury, May 25th, 2017.

In terms of regional/local infrastructure, this item was of interest.

"North Shore gas project still in the works," Northern Ontario Business, May 19th, 2017.

And of course, there are under the surface the constant rumblings of the Northern Ontario Party...that are probably destined to remain rumblings.

Northern Ontario Party calls for separation.  May 12th, 2017.

Related to the motif of northern resentment and unhappiness, there was this interesting segment on TVO's agenda hosted by Steve Paikin.  In the interview with former Ontario cabinet minister David Orazietti, the interesting point was made that despite the constant claims of alienation and under representation of northern Ontario interests at Queen's Park, on a per capita basis the north has more provincial cabinet ministers than Toronto.  Of course, the related news item is the by-election in the Sault for David Orazietti's vacated seat.

And there is one final item and this again related to institutions and what can often be their indirect impact on business and the economy.  In Thunder Bay we have the situation where the police chief has been placed on administrative suspension as a result of being charged with breach of trust and obstructing justice "stemming from allegations that he disclosed confidential information concerning Thunder Bay mayor Keith Hobbs."  I must admit this one is quite puzzling to me and comes on the heels of other rather odd stories involving the Mayor.  Without really knowing what is going on here, one must nevertheless express disappointment at a situation involving relationships between the senior figures of Thunder Bay's municipal government that does not reflect very well in the national media on a community constantly trying to sell itself as a good place to do business.  Coming at a time when Thunder Bay is also under scrutiny for its relations with indigenous people, one hopes that this matter is speedily resolved and Thunder Bay's leadership quickly moves on to dealing with better things.

Everyone, please try to have a nice weekend. 

Tuesday, 23 May 2017

The Decline of Saving

Most of us are aware that Canadian households have reached record levels of indebtedness over the last few years.  Household debt in Canada is now over $2 trillion and household debt to disposable income ratios in Canada are now at 170 percent.  Less discussed is what has happened to savings.  While low interest rates have been a factor in Canadians being able to carry substantially larger debt burdens, they have also been a factor in reducing the interest income from saving and as a result have led to a drop in the number of savers.

The Bank of Canada rate dropped from 6 percent in 2000 to 0.75 percent in 2015.  Over the same period, the total number of savers in Canada as reported by Statistics Canada from data compiled from Income Tax returns (Table 1110036 - Canadian savers, by savers characteristics, annually) dropped from 4,808,930 to 3,356,840 – a decline of 30 percent.  Over the same period, the median annual interest income of Canadians fell from $400 to $230, a drop of 43 percent.

Tuesday, 16 May 2017

The Northern Ontario Growth Plan: A Summary Evaluation

The Ontario government released the Growth Plan for Northern Ontario on March 4, 2011 in response to years of slow growth and economic stagnation in northern Ontario. In an effort to improve the economy of northern Ontario, the 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential.
After five years, it was worth examining key economic indicators to see what if any improvements have occurred with respect to the economy of northern Ontario.  After a series of posts examining employment, new investment spending, consumer and business bankruptcies and employment composition, what conclusions can be drawn?

Sunday, 14 May 2017

Economic News Around the North: May 14th Edition

Well it has been a few weeks since I did an economic news round-up.  To start off, Happy Mother's Day to all the moms in northern Ontario and beyond! Here is a very brief sampling of some of the northern Ontario related bigger picture economic stories that caught my attention over the last little while.

There have been a few interesting items over the last few weeks.  To start off, both Lakehead and Laurentian universities will be looking for new Presidents as Dominc Giroux and Brian Stevenson nearly simultaneously announced that they will be moving on.  Both institutions are key components of the regional knowledge economy as well as significant economic engines in their own right and the choices made with respect to the next presidents will be critical to the region.

Lakehead University President Brian Stevenson to step down. CBC News. Thunder Bay, April 28th, 2017.

Dominic Giroux to leave Laurentian University for CEO's job at Health Sciences North. CBC News, Sudbury, April 26, 2017.

The actual role of a university president has become more difficult over the years given the increasing complexity of universities and the social and economic environments in which they operate.  However, the key roles remain threefold: vision, fundraising and community relations.  The day to day management of the university is generally delegated to sub-ordinates - or  should be especially  at larger places.  In the end, a successful university president must be judged on their leadership role in terms of providing a general vision of the university's role and articulately communicating it, raising funds - a difficult task in the limited economic environment of northern Ontario - and diplomatic service among  the many communities that the university serves ranging from alumni to business to government.  Good luck to the respective search committees!

Monday, 8 May 2017

Why Northern Ontario Should Worry About an Aging Population

The release by Statistics Canada of  a second series of data from the 2016 Census on age and sex, and type of dwelling shows just how much Canada's population age distribution has changed.  In 1851, 45 percent of Canada population was aged 14 years or less while only 2.5% was 65 years and older. In 2016, only 16.6 percent of the population was aged 14 years or less while 16.9 percent was aged grater than 65 years.  As noted in the release, for the first time Canada's population of seniors outnumbered its children (5.9 million seniors versus 5.8 million aged 14 years or less).  It is truly a new age.

When the results are examined by CMA, it turns out that large urban centers are younger than the national average.  Canada  had 16.9 percent of their population aged 65 years and over and 16.6 percent aged 14 years or less.  In terms of seniors, the largest proportions were in Trois-Rivieres (22.3%), Peterborough (22.2%) and St. Catharines-Niagara (21.8%) while the lowest where in the west: Saskatoon (12.8%), Edmonton (12.3 percent) and Calgary (11%).  As for those aged 14 years and below, the largest proportions were again in the west: Lethbridge (19.1%), Saskatoon (18.9%) and Calgary (18.8%).  The smallest were in Trois-Rivieres (14.3%), Kelowna (14.2%) and Victoria (13.1%).

The two northern Ontario centers of Thunder Bay and Sudbury were generally on the older side with Sudbury coming out slightly younger.  Thunder Bay ranked 8th out of 35 CMAs in the proportion of seniors (19.8%) and 32nd out of 35 in the proportion aged 14 years or less (14.6%).  Sudbury was 12th in the proportion of seniors (18.3%) and 25th in the proportion of children (15.5%). Needless to say, an aging population has implications for future economic growth and these figures suggest that northern Ontario - as represented by Thunder Bay and Sudbury - faces a future of continued slower growth.

Sunday, 7 May 2017

Evaluating Northern Ontario's Growth Plan-Part V: Economic Diversification

This is the fifth in a series of posts in which I am presenting evidence evaluating the Growth Plan for Northern Ontario, which was released on March 4, 2011.  The 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential.
While the provincial government did commit itself to the development of performance measures for ministry specific initiatives that supported the implementation of the plan, I will be using a broader set of indicators of overall economic performance that are supported by the availability of readily accessible public data. 

My first post was an overview while my second post looked at employment.  My third post looked at new investment spending as measured by building permits and my fourth post looked at consumer and business bankruptcies as an indicator of economic health. In this fifth post, I will be looking at changes in the composition of employment between 2011 and 2016 as an indicator of diversification.

Measuring diversification can be a complicated issue.  Is a diversified economy one more reliant on services rather than primary industries - in which case we are already there as the bulk of employment in northern Ontario is service oriented.  Is a diversified economy one in which we are less reliant on resource extraction or on any one sector?  Given the growing reliance on public sector employment in northern Ontario one might argue we have become less diversified in recent years.  In short, any measure of economic diversity is bound to be imperfect.

Tuesday, 25 April 2017

Economic News Around the North: April 25th Edition

It has been a very busy few days when it comes to economic news affecting northern Ontario.  Here is a quick summary of stories:

Well, the softwood lumber dispute is back.  Just as the industry in northern Ontario was beginning to recover from the forest sector crisis, there is going to be a tariff on softwood lumber.  The rates apparently range from 3% to 24%.  Resolute is facing a 12.82 percent tariff with other producers in northern Ontario apparently getting the blanket tariff of 19.88 percent.

Canada vows to fight 'unfair and punitive duty' as Trump slaps tariff on softwood lumber. Financial Post. April 25th, 2017.

Ontario is launching its basic income pilot project and the northern Ontario city selected to participate is Thunder Bay (along with Lindsay and Hamilton) where about 1,000 households will be selected to participate.  According to the news item reported here: "A single person could receive up to about $17,000 a year, minus half of any income he or she earns. A couple could receive up to $24,000 per year. People with disabilities could receive up to $6,000 more per year."

Ontario basic income pilot to launch in Hamilton, Lindsay and Thunder Bay. CBC News, April 24, 2017.

I would imagine that none of the Thunder Bay recipients basic income will be residents of the new housing development approved by Thunder Bay City council this week. A 49 lot subdivision was approved that really is a testament to urban sprawl and an example of poor long-term financial planning given the costs of servicing the infrastructure. Ultimately a three kilometer sewer line will have to be extended from Parkdale to the new subdivision.  That is a long sewer line to put through very low urban density areas.

Maplewood Estates expansion approved by Thunder Bay city council. CBC News, Thunder Bay, April 25th, 2017.

In other news around the north.

New flight training centre could create up to 150 jobs in Sudbury. Northern Ontario Business. April 18th, 2017.

Northern Ontario railway still struggling. April 25th, 2017.

The release of the latest in a series of Northern Policy Institute reports on boosting immigration.

Project aims to attract immigrants to the North. Sault Star, April 20th, 2017.

Decline in available workers a growing concern. April 18th, 2017. 

Also in the Sault:

Ontario Supporting Craft Brewery Expansion in Sault Ste. Marie., April 21st, 2017.

City pleads the need for Essar's tax money. Sault Star. April 19th, 2017.

Some controversy still in North Bay regarding a new casino project.

Casino risky for economy., April 20th, 2017.

Is help on the way for northern Ontario from the federal government?  Apparently: "The federal government is working to attract jobs and qualified people to Northern Ontario in an attempt to turn around the loss of population – particularly young people – according to the federal minister of Innovation, Science and Economic Development."

"All-hands on deck" needed to reverse trend-minister. April 20th, 2017.  It was not exactly specified if the ship was heading into stormy waters or was sinking and needed to be abandoned.

And remember, Thursday is budget day in Ontario.  For my take on what to expect? See this.

Have a great week. 

Friday, 21 April 2017

Evaluating Northern Ontario’s Growth Plan-Part IV (Business and Consumer Insolvency)

This is the fourth in a series of posts in which I am presenting evidence evaluating the Growth Plan for Northern Ontario, which was released on March 4, 2011.  The 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential.
While the provincial government did commit itself to the development of performance measures for ministry specific initiatives that supported the implementation of the plan, I will be using a broader set of indicators of overall economic performance that are supported by the availability of readily accessible public data.  My first post was an overview while my second post looked at employment and my third post looked at new investment spending as measured by building permits. In this post, I will be looking at consumer and business bankruptcies or insolvencies as an indicator of economic health.  All other things, during times of economic distress, one would expect to see more consumer and business bankruptcies while during better economic times, the numbers should be expected to decline.

Tuesday, 18 April 2017

Mortality in the North

Ontario’s Health Quality Council has just released a new report on Health Equity in northern Ontario that shows that Ontario’s northern regions lag behind provincial averages in quality of health and health care.  The geographic focus of the report is on the area that “extends north of Lake Huron to Hudson Bay and James Bay, and from the Quebec border in the east to the Manitoba border in the west, which represent nearly 80% of Ontario’s landmass.”  If you do not want to read the report, there is a pretty good overview in the Globe and Mail.

While northern Ontario has seen health gains over time, it remains that the gap in health indicators between the north and the south is growing and it may be worse than the report suggests because the report’s data is drawn from Statistics Canada’s Community Health Survey, which does not cover Indigenous people living on reserves.  As it stands, the relative gap in mortality rates has grown to 30 percent in 2012 from a 12-17 percent range in 1992.  In 2012, the age standardized mortality rate per 1,000 people was 5.7 in the northwest, 5.7 in the northeast and 4.4 in Ontario.

People in the North West LHIN region have a life expectancy of 78.6 years, compared to 81.5 years in Ontario. People in the North East LHIN region also have a markedly lower life expectancy than Ontario overall, of 79.0 years, or 2.5 years shorter than the Ontario average. The North West LHIN region has nearly double Ontario’s number of potential years of life lost due to avoidable deaths, at 6,023 years lost per 100,000 people over a two-year period, compared to 3,243 years per 100,000 people in Ontario. The North East LHIN region also has considerably higher potential years of life lost due to avoidable deaths than Ontario, at 4,763 years per 100,000 people. People in northern Ontario are more likely to die prematurely due to suicide, circulatory and respiratory disease.

The reasons for these differences are complex.  The north is a sparsely populated region and the vast differences make it difficult to deliver the same level of care one might get in Toronto to smaller isolated communities.  There are also lifestyle factors such as higher smoking, drinking and obesity rates in the north.  For example, the self-reported smoking rate was 26.0% in the North East LHIN region and 22.9% in the North West LHIN region, compared to 17.3% in Ontario.

However, access is also still an an issue.  According to the report: “People in the north are less likely than Ontarians as a whole to report having a family doctor, nurse practitioner or other regular health care provider – 89.2% of people in the North East LHIN region and 83.8% in the North West LHIN region, compared to 93.8% of people in Ontario.”  The Globe and Mail story quotes NDP health critic Frances Gélinas as saying that part of the blame for health-quality gaps between the north and south lies with the Liberal government’s move to concentrate health services and surgeries in “centres of excellence” in big cities in the south.

To that, let me add the following anecdotal observation.  Its not just centralization in the south that may be affecting access to health care in northern Ontario but also concentration of health services and facilities within the north’s few major urban centers themselves.  Take the case of Thunder Bay since the new centralized hospital and new medical school were put into place over a decade ago, there has been a steady migration of health services and facilities to the area around the new hospital on the north side of the city.  Indeed, even the Fort William Clinic is now technically in what used to be the old City of Port Arthur.  Twenty years ago, hospitals, diagnostic facilities and clinics appeared to be much more dispersed across the city’s two north-south population clusters. 

I would like to see a study of if there has been any impact on access to medical services and access particularly for those on the south side of the city to physician visits and diagnostic tests.  Especially, how have seniors with limited mobility and lower income people on the south side continued to access physician appointments and tests.  Do they have a higher rate of cancellation?  Would the south side benefit from having an Urgent Care Access Center like the types that have been springing up in southern Ontario cities? Perhaps there has been no change but I would like to see some evidence based results because my gut feeling is that it is much harder to access care even in the north’s larger urban centers and the result is fewer people going to see doctors and getting tests.  Moreover, those most likely to not make it to the doctor may be among more vulnerable populations. However, gut feelings are not enough to make policy. We need evidence.

Friday, 14 April 2017

Economic News Around the North: April 14th Edition

Well, we are heading into the Easter weekend.  Spring is a time of rebirth and who knows, after two decades of slow growth, perhaps the north's economy will finally resurrect itself in the third. On the other hand, Good Friday this year coincides with the anniversary of the sinking of the Titanic. Here are some of the stories that I felt were of economic significance for northern Ontario over the last week or so. 

Gas prices soar in city. TbNewswatch, April 13th, 2017.

Well the price of gas has shot up again, just in time for a long weekend but it is a phenomenon that hit the entire province.  If you want some insight on Canadian gasoline prices in general, there is an old post I did on gas prices on Worthwhile Canadian Initiative that also attracted quite a few comments that provided some interesting points.  The long and short, in my opinion, prices are higher because the companies can get away with charging more.  Price differentials across regions have converged over time and this may signify greater market power on the part of gas companies.

Alexander Henry one step closer to returning home. CBCThunderBay. April 11th, 2017.

There seems to be some support for relocating the former icebreaker Alexander Henry from Kingston to Thunder Bay's waterfront.  In principle, this will be an excellent addition to the waterfront as it can serve as the core exhibit for a transportation museum.  This might mesh in nicely with the plans for a grain museum which is being worked on by Nancy Perozzo's group.  As well, there are plans to relocate the Thunder Bay Art Gallery to the waterfront also.  When one looks at the restaurant development in the Waterfront area combined with the location of Magnus Theatre and the long-term plans to place an Events Centre in the area, one can finally see a substantial entertainment district coming into shape.  The one caveat - customers and money.  I know, presenting caveats and pros and cons does not go over well with local movers and shakers who prefer expressions of cheerful mindless optimism when it comes to economic development in the north but Thunder Bay's tax base is under stress and the city's population base and market size are limited.  Can Thunder Bay become a tourism destination with its central Canadian waterfront marked as "The Mid-Coast?"  Who really knows?

Thunder Bay taxi bylaw causes concern for council, taxi companies.  CBCThunderBay. April 11th, 2017.

Getting a taxi in Thunder Bay is a ordeal.  If you ever needed a taxi in the middle of a weekday afternoon on short notice, forget it as they are all engaged in "school runs". This is another example of how dependent even the private sector in northern Ontario is on public sector spending.  I won't even get into trying to get a taxi at the airport or late on a weekend after an evening out or the price.  Supply constraints have been very profitable for Thunder Bay taxi companies and by taking five years to re-write the taxi bylaws, Thunder Bay City Council has been aiding and abetting a cozy oligopoly.

Other Thunder Bay economic news:

First salty arrives in port. TbNewswatch. April 8th, 2017.

Grain shipments make for busy March at Thunder Bay port. CBCThunderBay. April 5, 2017.

Well, this has all been rather Thunder Bay centric to this point.  In other news:

Sudbury loses 400 jobs in March. April 7th, 2017.

Yet, things are going to get better as the Canada Revenue Agency has announced it is adding 543 full-time jobs to the Sudbury tax centre.

Council sets criteria for location of new events centre. CBCNewsSudbury. April 12th, 2017.

Sudbury appears to be moving forward at a rapid clip with a site selection team in place.  However, four of the five members of the selection team appear to be directly related to Sudbury's municipal government with a consultant from PWC as the fifth.  It would have been useful from an optics point of view to have a more arm's length group of experts.  Apparently the criteria for site selection includes cost, economic impact and parking.  In the end, it is all about weighting the criteria and if parking carries the biggest weight, then one should expect the greenfield site outside of the downtown as the final destination.

Here are some interesting items from North Bay.

Casinos siphoned millions from Sudbury, Brantford and Thunder Bay in 2014-15. April 12th, 2017.

And in another tourism infrastructure related story. ..

North Bay city council votes to keep Dionne house. CBCNewsSudbury. April 5th, 2017.

The only surprise here is that the City of North Bay was actually considering giving the historically significant house to a group that was going to move it to a "pioneer village" project 70 miles south of North Bay.  Why stop there, maybe they should consider moving it to Thunder Bay's waterfront - a nice plot of land between the yet to be completed hotel and the new condos?  

And in the relentless and ongoing efforts to attract new business activity via marketing techniques....

Invest Sault Ste. Marie website launched. SaultOnline. April 6th, 2017.

Sault needs to find gaming 'sweet spot'. April 9th, 2017.

And in Timmins, this story about the mining sector.

Gold is the new economic driver for Ontario mining. April 12th, 2017.

There were a number of interesting comments made. I was particularly intrigued by the Red Tape Challenge - an Ontario government consultation program for mining asking for input on what could be done to make the mining industry work better with government.   Dealing with red tape by engaging in yet more consultation seems like a typically Ontario way to address questions of efficiency and regulatory barriers.  However, with respect to gold as a driver, according to the president of the Ontario Mining Association:
What has changed in Ontario in the last 10 years is that gold is now a larger contributor than nickel and copper. That’s new and it is a combination of the price of the commodities and the number of new discoveries of gold and the new investments around gold,” said Hodgson.

Have a nice long weekend.

Tuesday, 11 April 2017

How Many Jobs Have Been Created in Thunder Bay?

One of Thunder Bay's Members of Parliament and currently Minister of Employment, Workforce Development and Labour - Patty Hajdu - asserted in a letter to the Chronicle-Journal this morning that "In the last eight months alone, the Canadian economy has created more than a quarter-million full-time jobs. In fact, 1,600 jobs new jobs have been created here in Thunder Bay since we were elected."  Needless to say, this piqued my curiosity and so I went off to Statistics Canada to see what Thunder Bay's total employment numbers have looked like since October of 2015 - the year the Trudeau Liberals  took office.

The results are provided in Figure 1, and are monthly seasonally un-adjusted total employment (three month moving average) for the Thunder Bay CMA.  The numbers show rising monthly employment from October 2015 to August 2016 and a decline since.  In October of 2015, total employment in Thunder Bay was 59,100 jobs and the total employed reached a peak of 61,300 by August of 2016.  This represents an increase of 2,200 jobs.  However, between August of 2016 and March of 2017, employment then declines from 61,300 to 59,300 - a drop of 2,000 jobs.  So, based on these numbers, from October of 2015 to March of 2017 Thunder Bay goes from 59,100 to 59,300 jobs for an increase of 200 jobs.

Of course, while these numbers are three month moving averages, they are not adjusted for seasonality. If we go from October 2015 to October 2016, employment grows from 59,100 to 60,800 for an increase of 1,700 jobs.  If we go from March 2016 to March 2017, we see total employment grow from 59,500 to 59,300 jobs - a decline of 200 jobs.  Based on Figure 1, Thunder Bay may have indeed seen the creation of 1,600 new jobs since the election of the Trudeau Liberal government but it also appears to have lost nearly as many jobs making for little in the addition of net new employment.

Saturday, 8 April 2017

Evaluating Northern Ontario's Growth Plan-Part III: Investment Spending

This is the third in a series of posts in which I am presenting evidence evaluating the Growth Plan for Northern Ontario, which was released on March 4, 2011.  The 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy. The goal was strengthening the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential.
While the provincial government did commit itself to the development of performance measures for ministry specific initiatives that supported the implementation of the plan, I will be using a broader set of indicators of overall economic performance that are supported by the availability of readily accessible public data.  My first post was an overview of the series while my second post looked at employment. In this third post, I will be looking at new investment spending as measured by building permits.