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Thunder Bay City Council's Increasingly Out of Touch Vision for Thunder Bay

Thunder Bay City Council's Increasingly Out of Touch Vision for Thunder Bay

Northern Economist 2.0

THUNDER BAY, ONTARIO ~~~~~~  December 16, 2020  (LSN)  If history teaches us anything, it is that periods of pandemic are ultimately associated with eras of great economic and social change and disruption.  One only has to go back to the Black Death or The Spanish Flu to see the effects on labour markets and societal attitudes and ultimately all aspects of life.   Much like the wake of 9/11 which saw enhanced security measures entrenched forever, once the pandemic has subsided, there will not be a full return to the world we had before.

This era will be no different and in Thunder Bay all of these changes coincide with an increasing sense of disquiet many residents feel with respect to the direction the City has been taking.  Along with continuing high rates of crime, racism and mental illness, the lineups at food banks have been increasing and there seems to be a return to a wild west frontier mentality with the increasing number of people being stopped by police for driving under the influence. 

Moreover, there seems to be  an increasing sense of detachment from the public by the Mayor, City Councillors and Administrators whose recent decisions with respect to major capital projects such as the proposed Turf facility and new police facilities, the silence on the epidemic of home plumbing issues linked to City water, and a preoccupation with what seem to be superficial issues like tourism signs and future sporting events, all seem to conflict with what appear to be more pressing issues.  The discussion of rising taxes when other cities such as Kitchener or Edmonton have decided to keep their increases closer to zero provides another disconnect with residents.

 

The City is in the midst of major program reviews and yet City Councillors seem to shelve much of the advice provided while continually talking about the cost savings they have generated.  They are also being presented with a new master plan on regional paramedic services whose text underlines the ominous future of a city with stagnant population growth and yet ever rising needs for the services of paramedics due to aging as well as a population more prone to a variety of social ills.  With the 2021 budget coming, one is left with the impression that ultimately, the Mayor and Councillors are gearing up for another major tax hike to meet all of these needs given their unwillingness to prioritize.

So, the question is what kind of vision is driving the approach of successive City Councils and the Administrators and the policy apparatus in Thunder Bay?  One would venture that Thunder Bay City Council suffers from an increasingly stale 50-year old vision of what Thunder Bay needs.  That vision could be summarized as follows:  Thunder Bay is a regional center and strategically located full-service high-tech urban oasis set in a pristine natural wonderland with a wonderful quality of life on crucial east-west trade and transport routes whose full potential is unrealized.  Indeed, the entire City’s potential is unrealized and what Thunder Bay needs is continual infrastructure investment to attract people and effective communication of our potential to convey the message of how wonderful we are.  While Thunder Bay may have social problems, they are not any worse than other places and have been blown out of proportion by the national mediaCity residents need to have a positive attitude, stay the course on this strategy, and we need to invest in the public services and infrastructure to make it all happen.

This is in essence what has been driving policy in Thunder Bay since amalgamation.  Lost in this vision of the future is the fact that since 1970, the City has stayed static in population, its industrial mainstays have largely disappeared, and its grain transportation role fallen to a shadow of its former glory.   The fact that people often move to communities because of job opportunities seems lost on Thunder Bay’s governing elites.  Anyone pointing out the fact that the City has become a welfare dependency given that over 30 percent of employment is now public sector or tied to government grants is a “Negative Nellie.”  While there indeed has been some job creation in the knowledge economy and the health and education sectors that have helped provide a market for some entrepreneurs, it remains that this has been largely a rear-guard maintenance action that has had difficulty keeping pace with the employment losses.

</p> <p style=" text-align:start="">Key to this vision is the level of municipal spending, employment and infrastructure investment designed to keep the economy going via construction projects.   This spending is financed by government grants and by tax increases levied increasingly on the residential tax base given the departure of the industrial mainstays who provided the base for the past development of a very generous level of municipal spending.  Tax increases are justified by “a build it and they will come philosophy” even though after fifty years we have built a lot and population is still the same.  When the point on practically zero population growth is mentioned, the response is to mention that we have large numbers of temporary residents whether they be students or visitors from outlying First Nations who need services.  However, we do not seem to have numbers documenting this aside from the numbers City Councillors and Administrators like to throw out - numbers like “20,000 or 30,000 more” during meetings without good empirical evidence.  Most importantly, there is the unanswered question as to why municipal ratepayers should even be providing these additional population services out of a local property tax base?  Where are the provincial or federal governments in all of this?

When the high level of taxation is mentioned, the response is that yes, the tax rate is higher here but our cost of living is so much lower so it is “okay” to have local residents pay more on their property taxes to provide services comparable to other places.  From each according to their abilities, to each according to their needs.  However, by cost of living, City Councillors generally mean that we have lower average property prices without realizing that the reason we have lower property prices is because of the lack of population growth and the fact that higher tax rates have been capitalized into lower property values.  Indeed, property prices are as high as they are in Thunder Bay because of fairly effective supply management on new home building and low interest rates.  Then there is also the need to differentiate between costs and ability to pay for those costs.

Take for example a comparison between Toronto and Thunder Bay.  An average property in Toronto now sells for about one million dollars whereas an average property in Thunder Bay is closer to 300,000.  Given the average 2020 property tax rates of 0.599 in Toronto and 1.563 in Thunder Bay, the property taxes paid on an "average" property would be $4,689 in Thunder Bay and $5,990 in Toronto – 28 percent higher in Toronto.  The problem is that the basis of comparison should be similarly priced properties or similar properties (eg. a three bedroom bungalow in both locations) in which case the Thunder Bay home always pays substantially more.  If you have a $500,000 property in Thunder Bay – which many people now do – you are paying as much in property taxes as a property worth three times that in Toronto. 

</p></span></span></span></span></span></span></span></span></span></span></p> <p style=" text-align:start="">And then there is the ability to pay for those taxes which is financed out of current income.   According to the NUMBEO cost of living comparison website, in Thunder Bay, the average monthly salary after taxes is $2,783 while in Toronto it is $4,214 – 51 percent higher in Toronto.  Aside from rent and commuting costs, the cost of living for just about everything else is not that much lower in Thunder Bay compared to Toronto. 

So, we have an expensive vision of local and regional municipal government spending based on an economic base that no longer exists.  That vision is justified by a “build it and they will come philosophy” which after 50 years, has yet to yield results.  When the Mayor and Council are criticized – and assuming they choose to respond and do not just ignore you or disparage you as a crackpot - they respond with dubious arguments about how our cost of living and property values are lower thereby resulting in lower taxes meaning they can be raised more because they are a bargain compared to Toronto.  Of course, if the cost of living here was truly lower resulting in a surplus for local residents in excess of what they need, why we might not want to keep money in our own pockets rather than simply hand it over to the local municipal-industrial-construction complex is a question that Thunder Bay politicians do not want to answer. 

We are now in a time of great change and Thunder Bay will need to adapt as well as deal with the legacy of its past decisions. And yet, the old inflexible vision goes on, and so unfortunately does the sense of alienation felt by many local residents.  Thunder Bay needs a new vision and one that is sustainable given the current tax base.

 

 

 

 

 

 

 

 

 

 

 

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The Northern Economist blog started on Shaw Webspace as commentary and analysis of economic issues and policy from a Northern Ontario perspective by Livio Di Matteo, Professor of Economics at Lakehead University in Thunder Bay, Ontario, Canada. It had regular posts from November 2010 to February 2012. Posts continued on Northern Economist 2.0 until 2013 when I took an extended break. Occasional posts resumed effective December 2016. With Shaw terminating its blog space functions, I have archived the old posts at: northerneconomistarchive.blogspot.ca.

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