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Thunder Bay Budget 2020: A First Look

Thunder Bay Budget 2020: A First Look

the trend in the total levy over the last thirty years

THUNDER BAY, ONTARIO - January 5, 2020 (LSN)  The City of Thunder Bay has released its preliminary budget for 2020 and the proposed 2020 capital and operating budgets propose a municipal tax levy of $200.2 million which represents an increase in the levy of 3.17 percent over 2019.  This is by no means the final number and there will be public  meetings and deliberations on January 9th and February 3rd as well as council budget reviews on January 14th, 16th, 22nd and As usual much is being made of the net increase being only 2.32 percent after "growth" in the tax base but it remains that an increase in the total levy is what the increase in tax revenue ultimately is.  Taxes will be going up.

As the accompanying figure shows, the trend in the total levy over the last thirty years has been steadily upwards.  And, do not forget that on top of this,  the 2020 increase in the water rate will be 4 percent and that for the wastewater surcharge will be another 4 percent.29th.

Thunder Bay Tax Levy   Lake Superior News

A key driver of the proposed 2020 budget is an expansion of nearly $2 million dollars for the Thunder Bay Police Service.  This will be on top of funding being received from the provincial government spread over the next three years of $2.7 million for projects in human trafficking, flood way patrol and mobile crisis response.  There is also some anticipation that more provincial funding is on the way to specifically address gun and gang violence. Thus, there is a major expansion in police spending on the way but a significant chunk of the money is short-term funding from the province.  A key question is once the expansion has been implemented - and the short term funding ends - how sustainable will all that spending be?

In the end, the total increase in tax levy funded new spending will be $6.1 million and in percentage terms the proposed increase of 3.17 percent is well above the combined rate of population growth - effectively zero - and inflation which is at best 2 percent.  The argument has been made by the City Manager that policing costs are rising faster than other categories but that has been the case for some time.  Even if one accepts the $2 million increase in policing without question, there is another $4 million in new spending that needs to be justified and made more transparent. The list of items as it stands are for amounts of $0.4 million here and $0.6 million there which the average ratepayer does not really understand.  One could almost accept some increases if one could see something in the way of a new and needed service. Yet, that does not seem to be the case here.

A key addition that comes to mind and has been rejected in the past is dealing with the snow left at the end of your driveway by the City plows after a major snowfall. Given Thunder Bay's aging population and the effects of climate change bringing larger storms, the additional work required is starting to impose a significant strain on the home owning public.  Yet, to date such pleas have fallen on deaf ears.  As noted by the City:

 


"No, windrows across driveways will not be cleared by City Crews. Residents are responsible for the maintenance associated with their driveway, including the portion that is on City property. It is that portion of the City property which has been designed to provide snow storage during the winter. The City does not give up the right to store snow in that area of the boulevard when it allows the residents’ driveway to encroach across City property. It is important to note City crews have the important task of plowing snow on all City streets as quickly as possible. Snow removal from driveways is not a program offered by the City. "

Apparently, our driveways over the boulevard to access the street are an "encroachment" on City property so they can do whatever they want with the land - I suppose they could store gravel or manure there too if they wanted.  One is surprised the city does not put a toll gate at the end of everyone's driveway and charge a fee to drive onto their roadway but I digress.  It remains that windrow removal programs are offered by many other cities whose climate is actually milder than our own in the winter though to be fair they often do not clear the residential City sidewalks as done in Thunder Bay.

Some of the programs are targeted towards seniors or disabled residents such as in Milton or Oshawa.  Then there is Richmond Hill which has the cadillac of programs and now removes the windrows on all residential driveways.  The Richmond Hill windrow removal project was implemented in 2019 for all 55,000 households for a total annual cost of $4.4 million dollars. Markham also does windrow removal but for qualified registered applicants who must either be over 60 years of age or if under 60 have a medical note saying they cannot shovel snow.  Even Toronto has some windrow removal depending on your location in the city.  While one does not expect the upper end Richmond Hill program, it remains that when it comes to windrow removal, Thunder Bay is not even trying.

 


If the City of Thunder Bay is going to raise spending by $6.1 million dollars in 2020, one really needs to see a more concrete demonstration of value for money.  In the absence of new spending that can be tangibly seen as providing some direct benefits to homeowners who are footing more and more of the bill, it becomes difficult to accept we need levy increases in excess of the combined rate of inflation and population growth.  It is even more difficult given that over the last few years, the city inevitably posts surpluses - positive variances - in the millions of dollars that are then put into reserve funds.  Indeed, 2018 was close to a $4 million surplus though it should be noted that 2019 was tracking closer to a few hundred thousand with the associated plea that 2020 would require a larger tax increase. One suspects the  final surplus for 2019 will be larger once the 2020 budget deliberations are over and done with.

By: Livio Di Matteo: 

 

Livio Di Matteo

 

Livio Di Matteo   Lake Superior News

NORTHERN ECONOMIST 2.0

 

Professor of Economics, Lakehead University

 

Livio Di Matteo is a Senior Fellow at the Fraser Institute and Professor of Economics at Lakehead University in Thunder Bay, Ontario, where he specializes in public policy, health economics, public finance, and economic history. His recent work examines health-care spending and its sustainability. As well, he conducts research on the historical evolution of economic inequality.  Di Matteo is a member of the CIHI National Health Expenditure Advisory Panel, the Evidence Network (EvidenceNetwork.ca), and is a contributor to the economics blog, Worthwhile Canadian Initiative.  He has been listed in Canadian Who’s Who since 1995 and holds a Ph.D. from McMaster University, an M.A. from the University of Western Ontario, and a B.A. from Lakehead University.

 

 

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