Northern Economist 2.0

Sunday, 19 March 2017

Economic News Around Northern Ontario: March 19th Edition

Well, another week has come and gone and there are many economic stories bubbling around northern Ontario and even farther afield with implications for northern Ontario.  For example, this morning's Thunder Bay Chronicle-Journal reported on upcoming talks between the forest sector and the federal government on preparing for the upcoming Canada-US softwood lumber negotiations.  However, little information was provided in the story as to what strategy options are being explored as Canada moves into negotiations with the Trump administration on this file.

Stakes high for forestry sector, Chronicle-Journal March 19th, 2017.

The policies of the Trump administration will soon also be front and center with respect to environmental funding dealing with the Great Lakes.  The budget proposed in the United States has put forth rather large cuts to program spending and one area that will have a direct impact on northern Ontario is what seems to be the complete elimination of $300 million dollars annually for the Great Lakes Restoration Initiative with plans shifting the responsibility onto state and local governments.  See:

Canadian politicians outraged at Trump Great Lakes funding cuts.  The Globe and Mail, March 17th, 2017.

In brighter news, while northern Ontario reports the lowest optimism when it comes to construction activity in the Ontario Construction Secretariat 2017 Construction confidence Indicator, it is nevertheless up from 2016 and part of that optimism is due to a number of post-secondary construction projects in Sudbury and North Bay at Laurentian University and Canadore College.  However, the Trump effect is again rearing its head here as: "Despite the boost in overall confidence, nearly half of the 500 contractors surveyed report they expect the Donald Trump presidency to have a negative or harmful effect on Ontario’s economy and construction industry. This sentiment is most acute in Windsor-Sarnia where 59 per cent of respondents believe Trump’s government will harm Ontario’s economy." See:

Post-secondary projects generate optimism in North Bay, Sudbury-survey. North Bay Nugget, March 16th, 2017.

In business activity and expansion news:

Explor Resources starts drilling program on Timmins-area property. Northern Ontario Business. March 16th, 2017.

Prime Gelato makes the leap to grocery stores and restaurant menus in Thunder Bay. CBC News. March 17th, 2017.

U.S. Coast Guard ready to break ice from Duluth to Thunder Bay. CBC News. March 15th, 2017.

Seminar offered to help local firms export to the U.S. Saultonline. March 14th, 2017.

When it comes to civic issues and municipal government, a couple of items.  The urban renewal legacy of the 1970s haunts us still.  In Thunder Bay, they are revisiting the future of Victoriaville Mall.  In the 1970s, both the north and south downtowns in Thunder Bay (corresponding to the old cities of Port Arthur and Fort William) received urban renewal makeovers that in the long run were less than successful.  The Keskus Mall in downtown Port Arthur was eventually demolished to make way for the Casino but Victoriaville which was built right on the main downtown intersection and permanently affected traffic patterns lingers on and apparently costs the City of Thunder Bay $500,000 annually.  Victoriaville hit tough sledding right off the bat in the recession of the early 1980s as its anchor store -the Chapples family store - went under.  Keskus did not lose its major retail anchor until the late1990s when Eaton's went under. 

Thunder Bay city council considers step towards Victoriaville mall demolition. CBC News. March 15th, 2017.

And in Sudbury, the big municipal fiscal issue is the contentious reorganization of its fire and paramedic services with a big meeting slated for March 21st.  For my take on the issue and links to some of the news stories, see my earlier blog post here.

In Sudbury mining news, see:

Vale to mothball century-old Ontario nickel mine. March 13th, 2017.

It is also Federal budget week with the budget coming down March 22nd and we will have to see what emerges specifically geared towards northern Ontario.  For my contribution to federal budget debate this week, see here. Have a great week. 

Friday, 17 March 2017

Fire Services in the North: The Case of Sudbury

Sudbury is in a bit of a tizzy over proposed changes to its fire and paramedic services.  The proposed plan will see nine of the current 24 fire halls closed and a move to reduce the number of volunteer firefighters and hire more full time firefighters. The staff report estimates that the full-time compliment would go from 108 to 166 within the next decade, while the volunteer ranks would be almost cut in half from the current staffing level of 350.

Sudbury is a very large and dispersed municipality with the central core area served by full time firefighters and outlying areas served by volunteers who are paid part-time employees. Under the new plan, Sudbury's municipal government maintains that firefighters would be able to reach 90 percent of Greater Sudbury within nine minutes, as opposed to the current 69 percent.  Part of what is planned is an equalization of services to standardize and improve coverage and response times.  However, part of the plan also involves composite stations staffed by both full-time and volunteer firefighters, as well as increases in taxes in the areas currently served by volunteer firefighters.

It is useful to see where Greater Sudbury stands in its fire service costs relative to other cities in Ontario.  Figure 1 uses data from the BMA Management Consulting 2016 Municipal Study to plot the net per capita fire service costs (including amortization of any capital assets) for cities in Ontario with more than 100,000 of population as well as the Northern Ontario Five (N5) – Thunder Bay, Timmins, Sault Ste Marie, North Bay, and Greater Sudbury.  The results show quite a difference in per capita costs ranging from a high of $273 in Thunder Bay to a low of $102 in Milton.  Sudbury’s costs are quite modest coming in at $149 – the lowest among the N5 – and placing 22nd among the 27 cities in Figure 1. 
Of course, one can understand the concerns of ratepayers in Greater Sudbury that the proposed changes will raise costs and therefore raise taxes. The costs of fire fighting according to the BMA Municipal Study 2016 Report can vary as a result of a number of factors, which include:

1. The nature and extent of fire risks: The type of building construction, i.e. apartment dwellings vs. single-family homes versus institutions such as hospitals
2. Geography: Topography, urban/rural mix, road congestion and fire station locations and travel distances from those stations
3. Fire prevention and education efforts: Enforcement of the fire code, and the presence of working smoke alarms
4. Collective agreements: Differences in what stage of multi‐year agreements municipalities are at and also differences in agreements about how many staff are required on a fire vehicle
5. Staffing model: Full‐time firefighters or composite (full‐time and part‐time)

Costs in the end are an interactive function of the geographic area that must be served as well as the population base in that area that is available to cover the costs as well as its compactness - in other words, population density is a factor.  The importance of population density as a determinant of fire service costs is highlighted in Figure 2, which plots the net costs per capita of Figure 1 against population density (population per square kilometer) and reveals an inverse relationship when a linear regression is fitted to the data.  It of course does not control for any other variables and there is a fair amount of dispersion (the R-squared is also very low) around the fitted relationship but if Sudbury’s population density is plugged into the relationship, all other thing given, the per capita cost of its fire services rise to 181 dollars per capita.  Thus for Sudbury to be at 149 dollars per capita it must mean there are other factors affecting its costs or it is doing something to keep its costs well below – nearly 20 percent below - what is predicted by its population density alone.
It is the volunteer staffing model which has probably been a factor in keeping Sudbury’s fire fighting costs per capita relatively low given the large land area that must be served and the accompanying low population density.  Moving away from this model will probably bring Sudbury’s per capita costs more in line with other major Ontario municipalities.  No wonder ratepayers are upset.  At the same time, making the changes needs to weigh the improvements in service and response time that are expected to emerge against the expected additional costs.  It is an important cost-benefit analysis and should make for an interesting City council meeting in Sudbury on March 21st.

Thursday, 16 March 2017

A Brief History of Federal Budgets

The following op-ed appeared in the Waterloo Region Record, March 16th, 2017 and the New Brunswick Telegraph-Journal, March 13th, 2017.

The upcoming federal budget comes in Canada's 150th year — an important milestone for what is perhaps the most successful country in the world. The evolution of federal finances since 1867 reflects a changing economy and offers important lessons regarding the perils of persistent deficit spending and growing indebtedness.
Canada's federal government has indeed grown. In 1867, it had a budget of $14 million, an expenditure-to-GDP ratio of approximately five per cent, a net debt of $75.7 million, and a net debt-to-GDP ratio of 20 per cent. Transportation, communications and economic development accounted for a quarter of federal spending, and transfers to other governments 20 per cent. Meanwhile, debt service charges were 27 per cent due the newly formed federal government assuming provincial debts. There were no transfers to persons.
By comparison, total federal government spending in 2017 is estimated at $331 billion with an expenditure-to-GDP ratio of nearly 16 per cent and a net federal public debt of $760 billion, resulting in a debt-to-GDP ratio of 36 per cent. Assorted transfers to persons and other levels of governments now account for nearly two-thirds of federal government spending.
Until the First World War, customs duties dominated federal government revenue. The war effort sparked the search for new revenues leading to the creation of the first personal and corporate incomes taxes and the first federal sales tax. Over time, the importance of these three new revenue sources grew, and in 2017 it's anticipated that the personal income tax alone will make up 51 per cent of federal government revenue, with corporate taxes comprising 13 per cent and commodity taxes (GST, excise taxes and customs duties) making up 17 per cent.
The 150 years since Confederation have seen the federal government's primary focus transition from the active economic development of a country grounded in liberal economic principles to an activist role partly aimed at bringing about a more egalitarian society via social spending. Despite the benefits, expanded federal spending in the post-Second World War era — given the subsequent slowing of economic growth, rising interest rates and the absence of more concerted fiscal discipline — ultimately resulted in the 1990s federal debt crisis.
Prudent government spending is useful, such as the construction of the transcontinental CPR railway where subsidies encouraged the building of a risky transportation project. However, the same strategy also saw over-subsidization of the CPR and substantial subsidies to two other less-successful rail lines. More government spending is not always better, and that also applies to deficit financing.
Over the period 1867 to 2017, Canada's federal government ran a deficit nearly three-quarters of the time, with the largest deficits-to-GDP ratios during the two world wars and the great divergence between revenues and spending leading to the 1990s debt crisis. Large deficits and interest rates greater than the economy's growth rate during the 1970s and 1980s lead to a rising debt-to-GDP ratio and the federal fiscal crisis of the early 1990s.
The important policy decisions when it comes to spending are when to spend, what to spend, how much, and how to pay for it. The wrong answer to any of these questions has negative fiscal implications.
Given the surge in federal deficit financing in the wake of the 2016 budget, one wonders if the lessons of the 1990s have already been forgotten. While interest rates remain at historic lows, economic growth is also low, making a case for fiscal prudence given the dynamics of deficits and debt. The progress made in reducing the federal net debt-to-GDP ratio below 40 per cent will be largely squandered if we allow debt to once again grow uncontrollably.

Livio Di Matteo is a senior fellow at the Fraser Institute and professor of economics at Lakehead University. He is the author of “A Federal Fiscal History: Canada, 1867-2017.” Distributed by Troy Media

Sunday, 12 March 2017

Economic News Around the North: March 12th Edition

Here are some of the items that caught my interest this week in terms of some economic significance for northern Ontario as well as more general interest.  A fair number of stories having to do with mining and the growing feeling that there is finally a resurgence in the mining sector.  A story in this morning's Thunder Bay Chronicle Journal also mentioned that the Hemlo mine may have more life in it.   However, it is important to separate this from the hype regarding the Ring of Fire which faces a number of other obstacles (see my previous post).  As The Economist story referenced below noted: "The potential of “green” metals and minerals, which along with copper and cobalt include nickel, lithium and graphite, is adding to renewed excitement about investing in mining firms as they emerge from the wreckage of a $1trn splurge of over-investment during the China-led commodities supercycle, which began in the early 2000s. The most bullish argue that clean energy could be an even bigger source of demand than China has been in the past 15 years or so."

In other news, like Thunder Bay, Sudbury is also going through debate and discussion on a new arena and like iterations of the debate in Thunder Bay, location is an issue.  One view sees a new arena in the downtown area on the site of the current arena whereas another view wants it further afield.  Interesting point is the proposed price tag which comes in at $80 million dollars (plus another $20 million for land) which is  below what estimates ($114 million) for a new facility in Thunder Bay come in at. Sudbury is apparently also getting a new casino.

Casino Operator will focus on Sudbury in May. March 11th, 2017.

It also turns out there is a bit of contention over OPG jobs which have been moved out of North Bay and partly to Timmins and Cornwall, Ontario.  Jobs are a scarce commodity in the north and the broader public sector has become a pillar of most communities.  When it comes to employment, I suppose the public sector giveth and the public sector taketh away.  
20 OPG jobs coming to Timmins. TimminsToday. March 6th, 2017.
While North Bay is unhappy with the OPG development, it can take consolation in new dealings with Russia.  I would imagine this will provide opportunities for travel.

Invest North Bay signs agreement with Russian investment group. Northern Ontario Business. March 8th, 2017.

And for those of you waiting for what will happen to redevelop HMV properties being vacated in the north, this item.

Thunder Bay is apparently not getting one yet.  However, residents of Thunder Bay can take some solace in its new transit development courtesy of The Beaverton and more seriously the proposed infrastructure spending on its recreational facilities at local schools.  Regarding the proposed infrastructure spending on track and field facilities, a student is quoted as saying: "It's an opportunity to play on a field like to play on a field like the people down in southern Ontario get to play (on)." I suppose we can all regard this development as helping to level the playing field with respect to southern Ontario at least with respect to sports, if not the use of the English language. However, it may be a long-term investment in health via exercise as other stories suggest the North may still not be a very healthy place relative to southern Ontario. See for example: Grim Data Emerging. The Chronicle Journal. March 12th, 2017. This story did not provide a regional breakdown on snowmobile deaths but the gender breakdown shows males are more likely to die in snowmobile accidents.  On a per capita basis, there are probably more deaths in the north.  In the week of February 22nd, there were five fatalities - one in Oro-Medonte, one in Thorton, two in Nipigon and one in Lindsay, Ontario.

Have a great week.

Friday, 10 March 2017

The Wall

Thunder Bay is a relatively young city by historical standards and springing into life on the resource frontier and yearning for acceptance into the big leagues, it has always had a conflicted relationship with its architectural past.  Thunder Bay seems to equate growth and development with being new and something new is always assumed to be better except of course when it comes to its politicians as the longevity of its political representation often illustrates.  A great deal of Thunder Bay’s architectural heritage has been lost over the decades and invariably the arguments for tearing it down involve bringing in something new and supposedly cheaper. 

The latest case involves the controversy over “The Wall”.  Whereas Donald Trump’s “Wall” and the “The Wall” from Game of Thrones are both designed to keep people out, in Thunder Bay’s case, the wall along High Street was designed to keep things in place – it is a retaining wall.  Looking at it, one might think it is a remnant built in medieval times and anchored a fortress of the Knights Templar but it was built in the 1940s along a section of High Street –once one of Port Arthur’s most exclusive neighborhoods.  


Now, the wall is in need of repair and the majority of Thunder Bay city council has opted to replace it with a pre-cast concrete wall at a proposed cost of $2.4 million.  My guess is that members of City council probably think this is a reasonable compromise.  After all, it will still resemble an old wall and it will be new! Apparently, the members of the local Brick and Allied Craft Union who might be deemed to have some expertise with respect to bricks, stones and walls have suggested that the wall can be repaired and more cheaply than the $2.4 million earmarked for the replacement.

The attitude of City Council is probably best summarized by Mayor Hobbs, who stated in a letter to the editor that: “Historic Hadrian’s Wall is just a pile of crumbled stones now.  What is modern today and not satisfactory to some will one day be historic.  Roll with it folks.”  Needless to say, the remark succinctly reflects the attitude that has been responsible for the razing of large sections of our history.  And to be fair, it is an attitude that exists in  other parts of urban Canada.  Downtown Toronto has seen large swaths of its past similarly demolished because despite its size and self perceived sense of grandeur and sophistication, Toronto is really just a large version of Thunder Bay.

We are a young city and simply disposing of everything after 50 or 100 years means that in the end our city will always look like it has just been put together.  Perhaps this is what the vast majority of people in Thunder Bay prefer because they do not feel that their past is as glamorous as that of Athens, Rome, Paris or London.  Always having something new and shiny may give you something to boast about in the short run but it is short sighted and reflects a people who are fundamentally insecure about who and what they are.  True, we cannot keep everything but we should at least make more of an effort to give the past a fighting chance.

Tuesday, 7 March 2017

The Ring of Fire: Waiting for Ignition

There was an exchange in Ontario’s Legislature yesterday between MPP Norm Miller and Minister of Northern Development & Mines Bill Mauro regarding whether or not the government would “finally take a leadership role that will make the Ring of Fire a reality in Ontario?”  The minister responded that mineral exploration activity in Ontario was climbing and progress was being made and more specifically asserted that: “there are three other mines under construction in the province. But they want to spend their time focusing on one. There’s one not too far from my home community of Thunder Bay called the New Gold project. Speaker, right now it’s under construction and 600 people are working on a construction site. When that mine is open for the next 10, 20 or 30 years of its life, there are going to be 450 people working in that mine.”

My belief is that any full-blown development of the Ring of Fire is many years away given the ongoing negotiations with First Nations, the immense cost of transportation infrastructure to access the Ring of Fire as well as the state of resource and commodity markets.  However, it is worth examining whether there has been some progress in northern Ontario’s resource sector particularly when it comes to employment generation.  Figures 1 and 2 present employment in northern Ontario’s resource extraction sector as measured by Statistics Canada series  v91415810 (Northeast) and v91415829 (Northwest) on employment in Forestry, Fishing, Mining, Quarrying, Oil and Gas presented monthly from 3rd month 2001 to 1st month 2017.  


The results in Figure 1 show that while there is some substantial fluctuation in resource extraction over time with some large upswings, when a linear trend is fitted to the data the long-term performance is quite flat.  Indeed, average monthly employment was 21,500 in 2001 and 21,867 in 2016 – actually a 1.7 percent increase.   


Figure 2 is more interesting because it separates the employment data up into northeast and northwest Ontario.  While the northeast has trended up over time, the northwest has trended down.  Average monthly resource extraction employment in the northeast was 12,470 in 2001 and 17,892 in 2016 – an increase of average monthly employment over time of about 44 percent.  Meanwhile, the northwest has seen average monthly employment in resource extraction fall from 9,030 in 2001 to 3,975 in 2016 – a decline of 56 percent. 

This is a remarkable difference in performance and likely represents the long-term impact of the forest sector crisis on the northwest – which was much more forestry intensive than the northeast – as well as the relative success of mining in the northeast relative to the northwest.  While the northwest is seeing mining activity, it has not yet been on a sufficiently large enough scale to be the employment generator it is touted to be.  I suppose we are still waiting for the Ring of Fire to be ignited.

Friday, 3 March 2017

Economic News Around the North: March 3rd Edition

Well, this has been a busy week when it comes to news of economic significance for northern Ontario.  Here are some of the items that caught my interest with some occasional commentary.  Have a nice weekend!

Mining report card shows Ontario has room for improvement.  Northern Ontario Business. February 28th, 2017.

According to this report out of the Fraser Institute, Ontario has dropped to 18th place globally as an attractive place to do business in a mining company survey and ranking.

Sault Locks to open on March 25. Northern Ontario Business.  March 2nd, 2017.

Here's why health care funds for First Nations children aren't being spent. CBC News. March 3rd, 2017.

As is often the case, coordination and transactions costs are important elements in government and economic policy.  First Nation's health is under federal jurisdiction while health care is a provincial responsibility and most health services are provided under provincial jurisdiction and therefore require travel to access if you live on a remote reserve - yet travel costs are often not covered by Health Canada.

Thunder Bay shipyard owners reveal their plans. Tbnewswatch. February 28th, 2017.

Apparently, Thunder Bay's shipyard facility - a facility with a long and storied history dating back to the early 20th century - will soon be up and running again and creating 25 full-time jobs.

New garbage limit excludes apartment buildings and business. Tbnewswatch. February 28th, 2017.

This is quite an interesting story relating to municipal public finances.  The City of Thunder Bay is looking to save money by reducing the current limit of containers for residential garbage collection to two.  Apparently, these changes along with others will eliminate one truck and two positions through attrition resulting in savings of $150,000.  Needless to say, I am not particularly impressed with savings of $150,000 on a annual tax levy that is growing at over 3 percent a year and is approaching 200 million dollars.  Reducing the garbage limit is something that has been done in many other cities but it has been accompanied by substantial expansion of convenient recycling options.  This is not the case in Thunder Bay.  However, what is even more interesting to me is that businesses and apartment buildings are being excluded from the limit.  What this means is that residential ratepayers - who are now responsible for two-thirds of the tax levy - are seeing a 33 percent reduction in their service - while other ratepayers are seeing no change in their service level.  This essentially means that residential ratepayers are going to further subsidize the garbage service collection of non-residential rate payers.

A brief history of mining in Greater Sudbury. March 2, 2017.

Check out the historical footage on the accompanying video.

Timmins economic outlook predicts population decrease., February 26, 2017.

Mayor unable to confirm possible OPG job losses., March 1st, 2017.

And of course, what I think is the biggest story of the week given the energy intensive nature of northern Ontario economic activity...

Ontario cuts hydro bills by 17%, but ultimately it will cost ratepayers $1.4 billion a year more. Financial Post. March 2, 2017.

Essentially, Ontario electricity policy has become a case of either pay more now or pay more later with the distribution of payment over time a function of the temporal distance until the next election.  Editorial reaction is not particularly positive.  And, businesses are excluded from these hydro rate reductions apparently.  Besides, I just received a letter from my local hydro utility dated March 2nd that has "re-adjusted" my monthly billing amount and in an odd coincidence my new monthly bill just went up 17 percent!

Wednesday, 1 March 2017

Thunder Bay Airport Flying Higher

Thunder Bay Airport (YQT) has seen another year of growth hitting an all-time high for passenger numbers in 2016 by exceeding 800,000 passengers for the first time – 807,041 passengers to be exact.  Some of the recent growth has come from the depreciation in the Canadian dollar relative to the US dollar, which has attracted Americans away from airports in Duluth and Minneapolis.  This is certainly a welcome development given that market size in northwestern Ontario is relatively stable given population trends. This is also a regional success story and according to the Thunder Bay International Airport Authority’s (TBIAA) own estimates generates an estimated $645 million dollars in GDP annually and creates 5000 jobs. 

And of course, one does not need an economic impact study to see the importance of better air connections to Toronto with three airlines now competing for your business and offering on weekdays a total of 16 flights daily (Air Canada-6; Porter – 6; Westjet – 4).  When one adds seasonal flights to tropical destinations as well as assorted regional airlines like Wasaya and Bearskin, It is indeed a golden age for air travel out of Thunder Bay.

Figure 1 plots the total number of passengers out of Thunder Bay airport and they show an increase from 503,428 in 1997 to 807,041 in 2016 – an increase of 60 percent.  The average annual growth rate of passenger volume over this period has been 2.6 percent but there have been some fluctuations as Figure 2 illustrates.   

The years 2002, 2005 and 2008 saw large dips in the growth rate as a result of the forest sector crisis and the onset of the Great Recession.  There was a substantial rebound starting in 2009 but 2014 and 2015 also witnessed a flattening out of growth.  As a result, the increase of 4.5 percent in 2016 is certainly quite welcome and hopefully represents the start of a new growth curve similar to what occurred after 2009.  If this new phase of growth is being based on American travelers out of Minnesota taking advantage of a stronger US dollar then the exchange rate as well as border crossing issues will be crucial variables.

Historical Workshop This Weekend

The Lakehead Social History Institute is sponsoring a community workshop on quantitative history this weekend on Saturday March 4, 2017 at the Mary J. L. Black Library.    There will be five brief presentations on research using a variety of sources from 12:30 to 2:30 and then a hands on workshop from 2:30 to 4:30.  Admission is free.

I will be doing a presentation titled "Who Had What? A Quantitative Analysis of Wealth and Inequality in the Thunder Bay District Using Probate Data, 1885 to 1930."  I will be discussing my wealth research using probate records and apply the data I have compiled for the Thunder Bay District to examine trends in wealth during the foundation, settlement and boom periods of the Lakehead as well as the distribution of wealth and property.

See you there!

Saturday, 25 February 2017

Pictures from New York

Just got back from another visit to what is definitely one of the most fascinating cities on the planet.  With a population of nearly 9 million people in a total land area of about 300 square miles, the population density is intense.  Of course, there is then the population of the broader region – the Metropolitan Statistical Area (MSA) – that brings you to over 20 million people.  The result is a dense node of economic activity, creativity, diversity and energy and the views are spectacular.

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. February 21st, 2017.

DSSAB issue dividing region. 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.

Friday, 17 February 2017

Fiscal Comparisons for Major Northern Ontario Cities

The results of the 2016 Census for major northern Ontario cities draws attention to what I think is growing evidence that high and rising municipal property tax and user charge burdens have been inducing tax migration to surrounding lower tax townships and municipalities.  In many respects, northern Ontario cities are in a tough spot given that they have declining tax bases as a result of weak economic growth, dispersed urban areas to serve, weak population growth, and fixed costs and obligations to comply with provincial legislation affecting municipalities.

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.

Monday, 13 February 2017

Why the North's Cities are Losing Population

Everyone is still pretty much digesting last week's census results and the news that many northern Ontario's cities actually lost population.  Of course, the immediate gut reaction to the population decline of what are supposed to be the regional magnets for growth will focus on a slow economy as well as cries that the provincial government needs to do something.  I think its important to think more carefully about what actually is happening given that northern Ontario as a whole actually saw a slight population increase.  Here is my take on what some of the factors may be.

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. 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.

Wednesday, 8 February 2017

2016 Census of Canada: Northern Ontario Results

Well, the population counts of the 2016 Census of Canada were released by Statistics Canada today and there is an odd assortment of results for northern Ontario that are both good and bad. Canada's population in 2016 was 35,151,728 - an increase of 5 percent from 2011 - while Ontario's population was 13,448,494 - an increase of 4.6% from 2011.  Northern Ontario's population actually grew between 2011 and 2016 from 775,178 to reach 780,140 for an increase of 0.64 percent. 

Tuesday, 7 February 2017

Some Federal Fiscal Highlights

I have a new report out by the Fraser Institute in celebration of Canada's 150th Anniversary.  It is titled A Federal Fiscal History: Canada, 1867 to 2017 and tracks federal government spending, revenue, deficits, debt and spending and revenue composition from 1867 to 2017.  You can get the executive summary and the full report here.  However, is a quick round-up of some federal fiscal highlights over the years:

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. 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.

Wednesday, 1 February 2017

Demographics in Northern Ontario: Getting Ready for Census 2016

On February 8th, Statistics Canada is expected to release the Population and Dwelling Counts for the 2016 Census.  This is of interest everywhere but no more so than in northern Ontario where the 2011 Census registered population declines from 2006.  Indeed, the long-term trend has been for a shrinking population in northern Ontario both in absolute numbers and as share of Ontario’s population.  In 1976, northern Ontario (Algoma, Cochrane, Kenora, Manitoulin, Muskoka, Nipissing, Parry Sound, Rainy River, Sudbury [District & Regional Municipality], Thunder Bay & Temiskaming) accounted for about 10 percent of Ontario’s population whereas by 2011 it was down to 6 percent.

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",  January 26, 2017.

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

Thursday, 26 January 2017

Worthwhile Canadian Initiative Named a Top Blog

FocusEconomics has put together its list of the Top Economics and Finance Blogs of 2017 and Worthwhile Canadian Initiative, where I blog with Stephen Gordon, Nick Rowe and Frances Woolley, has made the list.   The list of 101 economics and finance blogs was compiled by the FocusEconomics team of economists. The criteria for inclusion in the list was simply that they had to have regularly blogged in 2016 and that they needed to be English-language blogs. The list is an eclectic mix of policy and economic viewpoints stretching from  the Keynesian school to the Chicago school to the Austrian school and everything in between. Delighted at the recognition (as well as the additional link provided to Northern Economist!)

Tuesday, 24 January 2017

Do Municipalities Really Need New Revenue Tools?

Municipalities in Ontario have been agitating for new revenues particularly given the sluggish growth in provincial government grants.  Well, apparently at least one municipal councilor in Thunder Bay also believes that cities need more revenue tools.  This is in spite of the evidence that Ontario municipalities have seen their revenues grow quite robustly over time.  According to the Financial InformationReturns maintained by the Ontario Ministry of Municipal Affairs, between 2000 and 2015, total municipal revenues in Ontario more than doubled growing from $22.7 billion to $47.8 billion.  While the growth rate has slowed somewhat since the 2009 recession, it remains that since 2000 these revenues have grown at an annual average rate of 5.2 percent.  This is much faster than either Ontario’s population or GDP growth.