tag:blogger.com,1999:blog-47252951025749023522023-11-16T02:38:51.341-08:00NORTHERN ECONOMIST 1.0 (ARCHIVE)Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-4725295102574902352.post-36344248435397896512016-12-14T16:29:00.002-08:002017-05-28T05:44:33.510-07:00Northern Economist: A Brief HistoryIn the fall of 2010, I decided to start an economic blog dealing with the economies of Thunder Bay and northern Ontario as well as economic issues in general from a northern Ontario perspective. The blog was a lot of work but it attracted a fair amount of interest given that it tackled many northern Ontario economic issues in an evidence based manner. The blog was initially hosted on Shaw Webspace but it eventually ran out of space on the server - Shaw apparently allocated a rather tiny amount of space - and it migrated in February of 2012 to Blogspot as <a href="http://northerneconomist.blogspot.ca/">Northern Economist 2.0</a> (hence the reference to this first site as Northern Economist 1.0). Shaw recently announced that they were ending their webspace service as of March 6, 2017 so I decided to preserve as much as possible of the original set of posts on this site as an archive. The look and feel of the original posts as well as many of the links are gone but the main content remains. Enjoy the posts! I am still blogging and post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/livio-de-matteo/">Worthwhile Canadian Initiative</a> and <a href="https://www.fraserinstitute.org/content/prof-livio-di-matteo">The Fraser Institute Blog</a>. As well, you can still catch occasional posts on northern Ontario related material on <a href="http://northerneconomist.blogspot.ca/">Northern Economist 2.0</a>. Cheers. Livio Di Matteo.Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-68036214714778495152016-12-14T16:16:00.001-08:002017-05-28T05:44:58.238-07:00Biography<div class="p1">
<b>Biography</b></div>
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<b>Livio Di Matteo</b></div>
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<b><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9MFjJuFlIGg-oQdkK-SXJOI8vkvrnKcLZx_Rt-eriQWM4lZu9Z9FXHkUT3wybgcJ-q8AiTzlkBYAT5ElInhiUWp0l1yFc8GOTGMaPNQS4bE5itB7VhrNArL6DLra9tGXdbjobeAhKKpTM/s1600/profile-dimatteo.jpeg" imageanchor="1"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9MFjJuFlIGg-oQdkK-SXJOI8vkvrnKcLZx_Rt-eriQWM4lZu9Z9FXHkUT3wybgcJ-q8AiTzlkBYAT5ElInhiUWp0l1yFc8GOTGMaPNQS4bE5itB7VhrNArL6DLra9tGXdbjobeAhKKpTM/s1600/profile-dimatteo.jpeg" /></a></b></div>
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Livio Di Matteo is an economist in Thunder Bay, Ontario specializing in public policy, health economics, public finance and economic history. Livio Di Matteo is a graduate of the Fort William Collegiate Institute (1898-2005) whose school motto “Agimus Meliora” has served as a personal inspiration. Livio Di Matteo holds a PhD from McMaster University, an MA from the University of Western Ontario and an Honours BA from Lakehead University. He is Professor of Economics at Lakehead University where he has served since 1990. His research has explored the sustainability of provincial government health spending, historical wealth and asset holding and economic performance and institutions in Northwestern Ontario and the central North American economic region. His historical wealth research using census-linked probate records is funded by grants from the Social Sciences and Humanities Research Council of Canada. He has constructed, assembled and analyzed nearly 12,000 estate files for Ontario over the period 1870 to 1930. Livio Di Matteo writes and comments on public policy and his articles have appeared in the National Post, Toronto Star, the Winnipeg Free Press and Thunder Bay Chronicle-Journal. He is also a contributor to Worthwhile Canadian Initiative, Canada's premier economics blog. Livio Di Matteo has had an entry in <b>Canadian Who's Who</b> since 1995.</div>
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<b>My E-Mail</b>: livio.dimatteo AT lakeheadu.ca</div>
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<b>Office Phone</b>: 807-343-8545</div>
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<span class="s1"><b>My University Web Page</b>: <a href="http://economics.lakeheadu.ca/dimatteo/dimatteo.html">http://economics.lakeheadu.ca/dimatteo/dimatteo.html</a></span></div>
Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-15407388760659153252016-12-14T16:14:00.003-08:002017-05-28T05:45:24.621-07:00February 2012 Posts<div class="p1">
<b>1 Post from February 2012</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_is_moving/"><b>NORTHERN ECONOMIST IS MOVING!</b></a></div>
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<li class="li3">Feb 1, 2012<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/blogspot/"><span class="s2">blogspot</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/moving/"><span class="s2">moving</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+economist/"><span class="s2">northern economist</span></a></li>
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Well, it turns out that my home here on Shaw Webspace has reached the limits of its space. It is hard to believe that you can run out of space on the internet in this day and age but apparently I'm out of room here and therefore my new posts will be migrating to Blogspot.com. You can access my new Northern Economist 2.0 Blog at <a href="http://northerneconomist.blogspot.com/"><span class="s2">http://northerneconomist.blogspot.com</span></a> and continue reading my posts there. </div>
Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-8977546261017266732016-12-14T16:13:00.006-08:002017-05-28T05:52:33.060-07:00January 2012 Posts<div class="p1">
<b>23 Posts from January 2012</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/golf_courses__selling_municipal_/"><b>Golf Courses, Selling Municipal Assets and Fiscal Planning</b></a></div>
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<li class="li3"><span class="s1">Jan 31, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/assets/"><span class="s3">assets</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/city+council/"><span class="s3">city council</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/finances/"><span class="s3">finances</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+golf+course/"><span class="s3">municipal golf course</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/selling/"><span class="s3">selling</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></span></li>
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City Council in Thunder Bay is wrestling with whether or not to sell one of its golf courses - most likely, the Municipal golf course which at nine holes is the smallest of its three golf courses (the others being Strathcona and Chapples). The budget is tight and the city's three golf courses together cost 400,000 dollars to operate and closing one would apparently save about 100,000 dollars. At the same time green fees do cover between 70 and 85 percent of the costs so on net these three golf courses cost the city about 120,000 to 60,000 dollars in net costs to operate. On a net operating budget of about 190 million dollars, saving this expenditure will not of itself restore fiscal balance.</div>
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Given the City's rising expenditures and revenue needs and the desire to embark on new capital spending, what councilors and administration are really contemplating is the asset value of Municipal Golf Course. With its rolling landscape and rural location, it will likely be purchased by a property developer for premium estate sized lot housing. It has been estimated in the past that Municipal Golf course could fetch about 1.2 million dollars which represents a nice little pot of money for the City. One could imagine given the rising housing prices in Thunder Bay that this land is now worth considerably more.</div>
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There are two issues here. The first is whether or not the City of Thunder Bay should be in the golf business. On the one hand, golf is not an essential municipal service and the case can be made that the city should divest itself of the operations of a golf course. On the other hand, Thunder Bay has a long history of municipal involvement in cultural and recreation facilities and subsidizing these activities for public use. In the end, whether or not the City should run the golf courses is a social and political choice and what council decides here will depend on how the wind blows. Do not expect consistency. Selling one golf course but keeping two still means it is in the golf business. On the other hand, consistency would also require a review of a whole lot of other things the City operates such as the Community Auditorium. Political and social choices do not always follow any pattern of logical consistency.</div>
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The more interesting issue is how should the city proceed with selling Municipal. Simply selling off the land and using the revenues generated to fund current operating spending for the coming year smacks of opportunism and desperation. It is a short term response to the fiscal constraints and avoids dealing with a more comprehensive review of all Thunder Bay City spending and operations. If Municipal golf course is sold, the money should go either into reserves or a separate fund to maintain and renew the two other city owned and run golf courses. This would be more responsible fiscal planning. Simply selling off the course and spending the money to meet current operating expenditures would mean open season on all city assets and would indicate that Thunder Bay's civic leadership is unwilling and unable to deal with its finances in a responsible way. Oh, one more point. Not all of this land needs to be sold for housing. It would be forward looking if a few acres of it could be set aside as public space for future generations.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/canada_s_evolving_federal_balanc/"><b>Canada's Evolving Federal Balance & The North's Economic Planning</b></a></div>
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<li class="li3"><span class="s1">Jan 29, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/centralization/"><span class="s3">centralization</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/decentralization/"><span class="s3">decentralization</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+planning/"><span class="s3">economic planning</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/expenditure+shares/"><span class="s3">expenditure shares</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal/"><span class="s3">federal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+federalism/"><span class="s3">fiscal federalism</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/joint+task+force/"><span class="s3">joint task force</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/jtf/"><span class="s3">jtf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s3">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/"><span class="s3">provinces</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenue+shares/"><span class="s3">revenue shares</span></a></span></li>
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The Canadian Federation is an institutional arrangement whereby the constituent units are able to both cooperate and compete with jurisdictions that are both separate and coordinate. The debate over the respective roles of the federal and provincial governments has taken various forms over time with views that emphasize the centrality of the federal government along with others that emphasize the federation as a compact amongst equals with the federal government as more of a coordinator. Given that political discourse and decision making out of Ottawa has recently been taking a more decentralized tone when it comes to federal-provincial matters, it might be instructive to take a look at the numbers to see what the balance is between the respective tiers of the Canadian federation.</div>
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I’ve gone to the Federal Fiscal Reference Tables to collect data for a basic set of centralization (or decentralization) measures for the period 1966 to 2009. The first figure takes the ratio of a tier’s own-source revenue (that is, without intergovernmental transfers) to the total of federal, provincial-territorial and local own-source revenue. The second figure, takes the ratio of a tier’s spending (net of transfers made to the lower tier) to the total of federal, provincial and local spending (with the spending of each tier net of intergovernmental transfers to the next tier). The point of this is to take a look at the relative resource and expenditure shares across the tiers of the federation. The results depict what most of us probably already know but which can now be visually demonstrated. Canada has become more decentralized at the federal-provincial level but the results also suggest it has become more centralized at the provincial local level.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq5C2PXtuT5xh2hWVYdkS5aoQ0IkG8d1KjIXCc5XFzUQhBTWW3vGxXSGwF4Q-CpscOk1UUlVb0CNPZlHKKbWFIUlTYXhDN5qpppMUqdtscjzXiB-79lPOJsbQTdGbk5SBNc3p-BgH73ZYT/s1600/preview_slide1-174.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq5C2PXtuT5xh2hWVYdkS5aoQ0IkG8d1KjIXCc5XFzUQhBTWW3vGxXSGwF4Q-CpscOk1UUlVb0CNPZlHKKbWFIUlTYXhDN5qpppMUqdtscjzXiB-79lPOJsbQTdGbk5SBNc3p-BgH73ZYT/s640/preview_slide1-174.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEichCfQOY8tHv3UDtjGNPyonwNU5Gsjih39p5ATeX667Jaz2hF_dUvHH8rpbIn3Jm-y-MbnNiQQjmlJq1AMvwQ3dfMK3ZW7RZqr48pJEKsPh0x7HFMQcVNlimsemVy7pWTXxiJVDUiOKxW0/s1600/preview_slide1-175.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEichCfQOY8tHv3UDtjGNPyonwNU5Gsjih39p5ATeX667Jaz2hF_dUvHH8rpbIn3Jm-y-MbnNiQQjmlJq1AMvwQ3dfMK3ZW7RZqr48pJEKsPh0x7HFMQcVNlimsemVy7pWTXxiJVDUiOKxW0/s640/preview_slide1-175.jpg" width="640" /></a></div>
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In 1966, the federal government accounted for 43 percent of spending, the provincial-territorial level 32 percent and local governments 25 percent. By 2009, the federal share was down to 31 percent and the local share down to 20 percent while the provincial-territorial share was up to 49 percent. Indeed, given that under the constitution municipalities are “creatures” of the provinces, there are really only two levels of government. The Canadian Federation has decentralized to the point where more than two-thirds of spending is now at the provincial-local level. Own-source revenues have not decentralized as dramatically. In 1966, the federal government accounted for about 50 percent of own-source revenues, the provincial-territorial sector 34 percent and the local sector 16 percent. By 2009, the shift was down to 40 percent for the federal level, up to about 46 percent for the provincial-territorial level and down to approximately 13 percent for local governments (numbers have been rounded).</div>
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A more decentralized Canadian federation is not a future possibility - it is already here. Whether this is a return to the “classical” federalism referred to by Tom Flanagan in a recent Globe and Mail piece is subject to debate. If one goes back to the immediate post-Confederation period, spending and revenues were also concentrated at the federal level and they became more concentrated in the twentieth century as result of the world war years. While the federal government practiced “executive federalism” in the second half of the twentieth century, Canada was nonetheless decentralizing as expenditures in provincial areas of jurisdiction –health, education and social welfare – grew.</div>
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The question is whether or not this is exactly the decentralization we want. Even if we accept that the provinces should be a more dominant fiscal tier given their responsibilities for health, education and social welfare, do we now want to simply transfer more tax points to the provinces and eliminate federal-provincial grants all together so that revenue shares better reflect expenditure shares? What about the cities? Cities are increasingly where most Canadians live and their governments and services are the closest to the taxpayer and yet the balance has shifted away from them also. Our focus has been so dominated by Ottawa’s relationship with the provinces that we have ignored the local sector’s relationship with their respective provinces. While Ottawa and the provinces have engaged in a process of give and take over 140 years given a framework and powers set forth in the constitution, municipalities have only what the provinces let them have. Based on these figures, it has been mainly the provinces taking and little giving to the municipalities or regional governments over the last few decades. </div>
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With respect to northern Ontario, this type of long-term trend does not bode well for any prospect of decentralization of any type of decision making authority from Queen's Park to the North. While in Northwestern Ontario, we are currently engaged in a process of regional economic planning, this will likely result in a set of consultative rather than action oriented institutions and processes that will retain control in the hands of Queen's Park. The final draft report (January 2012) released by the Northwestern Ontario Joint Task Force titled <a href="http://ldimatte.shawwebspace.ca/blog/edit/canada_s_evolving_federal_balanc/www.nwoeconomiczone.ca/?pgid=5"><span class="s3">Regional Economic Development Planning Zones Pilot Project</span></a> presents a model in many ways similar to the NWORDA concept of several years back and lays out a mandate for a Northwestern Regional Development Authority (REDA) with its own board. Will the province provide it's CEO and Board with revenue raising capacity (say from resource rents) to create a development fund to make strategic investments? Will it give it access to allocation of a share of the Northern Ontario Heritage fund for regional projects? Will it be allowed to make decisions on wood and fibre allocations? Without these types of powers, REDA will be merely another talk forum piled upon layers of regional discussions that have been occurring for decades.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/investment_activity_and_trends_i/"><b>Investment Activity and Trends in Northern Ontario: First in a Series</b></a></div>
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<li class="li3"><span class="s1">Jan 28, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/boom/"><span class="s3">boom</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/building+permits/"><span class="s3">building permits</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/bust/"><span class="s3">bust</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/investment/"><span class="s3">investment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/trends/"><span class="s3">trends</span></a></span></li>
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Building permits issued and their values are an important indicator of the pace and pattern of capital formation in an economy. Northern Ontario’s resource based economy is often characterized by booms and busts in employment and output, and investment spending is no exception. Figure 1 below takes the total value of building permits issued in Northeastern and Northwestern Ontario, adjusts for inflation by converting into 1997 dollars and combines them into a series for Northern Ontario as a whole. The results are quite indicative of relatively longer-term boom and bust cycles not always directly tied to recessions (1981-82, 1991-92, 2009). </div>
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The period from the mid 1970s to 1982 was a period of decline in the real value of new investment activity and investment spending was already low when the 1981-82 recession hit. The period from 1982 to 1989 was definitely a boom period but a decline had set in even before the 1991 recession hit. The entire period from 1989 to 1998 appears to have been a bust in the North. However, since 1998, there has been a pretty steady upswing in the real value of building permits and even the 2009 recession period has not resulted in too steep a drop in activity. However, the peak reached in 2008 is nowhere near the peak of 1989 in terms of real values. If one fits a linear trend line to this data, one can see that the long-term trend is essentially flat. There have been ups and downs but overall, this entire 35-year period – nearly half a lifetime – is a flat performance. Compare this to Ontario as a whole (Figure 2) which also exhibits a boom/bust cycle but an overall steep upward trend over the same period when a linear trend is fitted. One similarity is the relative size of the peak in the 1980s for both Ontario as a whole as well as the North - it has yet to be surpassed by either suggesting the uniqueness and intensity of the 1980s investment boom.</div>
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However, there is more to this data than meets the eye. Over the next few posts, I plan to break down this data into Northeastern and Northwestern Ontario, Thunder Bay and Greater Sudbury as well as the actual categories of residential, industrial, commercial and institutional permits. The aggregate data and its broad trends does not do justice to the regional and investment sector stories that have also been occurring with respect to investment spending in Northern Ontario.</div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/sorting_out_thunder_bay_s_2012_m/">Sorting Out Thunder Bay's 2012 Municipal Tax Increase</a></b></div>
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<li class="li9">Jan 24, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2012/"><span class="s3">2012</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/budget/"><span class="s3">budget</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/city/"><span class="s3">city</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/estimates/"><span class="s3">estimates</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tax+increase/"><span class="s3">tax increase</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></li>
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City council met last night and received the proposed budget for the 2012 tax year along with proposed tax and rate information. According to the budget highlights fact sheet and reports in the local media, the budget as currently proposed will result in property taxes of $2,568 for the average residential property in 2012 representing an increase of $67 or 2.67 percent - up from $2,501 last year. What is not immediately clear from all of this is whether this 2.67 percent increase includes the 1.5 percent rate increase for infrastructure under Renew Thunder Bay that was proposed and voted on in November or whether that increase will be voted on separately and result in a tax increase on top of the 2.67 percent. In addition, it was also reported that there would be a 6 percent increase in the water rates resulting in an increase for the average user of 52 dollars. Based on this amount, it would make the current average water bill for a city ratepayer about 866 dollars resulting in an increase to 918 dollars. What is the total increase to City ratepayers in the money they will be sending to city Hall next year? Well, for an average household- the total in terms of property taxes and water fees in 2011 can be estimated at $3,367 dollar. For 2012, the estimate would be $3,486. This represents a total increase of 119 dollars or 3.5 percent. The only other question is if this includes the 1.5 percent increase for infrastructure under Renew Thunder Bay or if that amount is on top.</div>
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<b>January 27th update!!!</b></div>
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It would appear that numbers are still being revised. This morning's media report was that the water rate increase was going to be 7 percent and thatb this represents an increase for the average household of 50 dollars. This also means that with the average water bill before the increase was 714 dollars which brings it up to 764 dollars for 2012. As a result, the above estimate for total payments to the city for taxes and water can be revised. Now, total payments for taxes and water for an average residence were $3,215 in 2011 and will go up $117 to $3,332 in 2012 representing a 3.6 percent increase in total payments to the city. Still no clarification on if the 1.5 percent Renew Thunder Bay increase is included in these increases or is on top.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_political_calculus_of_defici/"><b>The Political Calculus of Deficit Reduction: Ontario Style</b></a></div>
<ul class="ul1">
<li class="li9">Jan 23, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/don+drummond/"><span class="s3">don drummond</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/scenarios/"><span class="s3">scenarios</span></a></li>
</ul>
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Ontario is embarking on a strategy to bring its 16 billion dollar deficit under control. As much as this process involves economic decision-making, in the end it will be largely driven by politics and the politics are complicated because of the minority provincial government situation. The spring budget needs the support of one of the opposition parties or a defector in order to pass. Otherwise, the government will fall and there will be another election.</div>
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The provincial government has enlisted the services of Don Drummond to draw up a list of recommendations and suggestions. The advance barrage of leaks and releases in the media, which suggest complete restructuring of the government and cuts of up to 30 percent, are designed to soften up the public for bad news as well as gauge their reaction in terms of what the art of the possible will be. The provincial government already knows what the main thrust and details of the Drummond Report are and is now crafting its political strategy and scenarios. As long as it is able to set the agenda, the provincial government is in the driver’s seat on this one and often in a win-win situation given the possible reactions of the two opposition parties.</div>
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What are some possible scenarios? Scenario I. If the provincial government unveils massive expenditure cuts and embraces them, it could try to enlist the support of the Progressive Conservatives while at the same time spinning the cuts as having to be done because of Conservative pressure. Should the Conservatives support the government, the Liberals will argue their hands are tied because of the minority government and invoke the ghost of Mike Harris as the real driver behind the austerity. Should the Conservatives balk at the reckless nature of the cuts, they will be painted as fiscally irresponsible and not worthy of forming a government because they cannot make tough decisions. Of course, the Conservatives linking up and supporting the Liberals in a program of cuts ultimately may weaken both of them and put the NDP in a better position to gain more seats once the government falls. </div>
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Scenario II. The provincial government distances itself from the economic bogeyman of massive cuts and argues the responsible thing to do is a more restrained set of cuts and restructuring and possibly even consider revenue augmentation by delaying the planned corporate tax reduction. The Conservative will likely react to this as fiscally irresponsible and not conducive to economic growth paving the way for NDP support. This scenario strengthens the hand of the opposition Conservatives particularly should the NDP supported liberal plan turn out to not do very much to reduce the deficit. The Liberal gamble here is that they might draw soft NDP supporters into their fold once the inevitable election occurs thus ensuring a majority.</div>
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Scenario III. The Liberals are planning an election to obtain a majority government. They will present a tough spring budget putting forth most of the the Drummond recommendations and argue that tough fiscal times are times for sharing fiscal pain and also delay the corporate tax reductions and maybe even throw in an income tax deficit fighting surcharge. The object would be to have both the NDP and the Conservatives vote against the budget upon which they will both be branded as fiscally irresponsible and the Liberals will campaign in a spring election on a claim as the most responsible stewards of Ontario’s public finances. The aim here would be to draw away both soft Conservative and NDP supporters with their claim of a "balanced" deficit reduction strategy.</div>
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All of these scenarios are of course hypothetical and all kinds of unanticipated events may occur over the next few months. A key one is a defection from one of the parties to the Liberals which would provide them with a majority and therefore give them greater independence in decision-making. All of the above hypothetical scenarios, however, involve the opposition reacting to what the government does. What would a good strategy for the opposition parties be? The opposition parties need to be ready to take the initiative. The two opposition parties should have their own credible deficit reduction plans in hand to immediately counter what the Liberals are going to propose. After that, there will either be some political trades that in a minority situation will actually generate a set of compromise fiscal strategies everyone can live with. Or, the government will fall and there will be an election with distinct deficit fighting strategies outlined by the three parties. The common problem facing all three parties in this case as they approach the electorate is answering the following question: If Ontario truly is in an urgent fiscal crisis that requires a team approach and everyone sharing the pain, then why are we having another election?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/cibc_metro_monitor_and_thunder_b/"><b>CIBC Metro Monitor and Thunder Bay – An Analysis</b></a></div>
<ul class="ul1">
<li class="li9">Jan 21, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: none</li>
</ul>
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The January 19<span class="s4"><sup>th</sup></span>, 2012 issue of CIBC’s Metro Monitor again assesses the relative performance of Canada’s major urban centers using a weighted index that then ranks the performance from highest to lowest for the 3<span class="s4"><sup>rd</sup></span> quarter of 2011. Of the 25 urban centers ranked, Toronto ranks first, followed by Edmonton and Kitchener. Thunder Bay ranks last, behind Saguenay and Windsor. The publication is quick to note that the ranking figure represents an index reading and not the actual rate of economic growth, which I suppose is reassuring given that Thunder Bay and Saguenay get negative index numbers.</div>
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Thunder Bay scores poorly in the areas of population growth, employment growth, business bankruptcies, the growth rate of multiple listing unit sales and non-residential building permits. It is in the middle of the pack for the unemployment rate, the full time share of total employment and consumer bankruptcy rate. There is some good news despite all this poor performance – Thunder Bay leads the 25 metropolitan centers in the percentage growth of the MLS average price and in the percentage growth in new housing starts. </div>
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What explains this? Well, here are a few suggestions. Perhaps those people in Thunder Bay who have been able to hold onto a job or have benefited from the growth of the knowledge sector and public sector employment could be driving up the prices. Or perhaps, there are a lot of former residents from Thunder Bay who are retiring here and buying up properties. Or, Thunder Bay’s housing market is being fueled by external money with Thunder Bay’s relatively cheap housing being snapped by non-residents looking for an investment. Or, Thunder Bay’s economy is doing a lot better than the official indicators suggest because there has been growth in self-employment and small businesses. Or, despite the weak employment growth, there is a large underground economy generating cash. Or, despite the weak employment growth, there is a lot of money floating around because displaced workers are all working in Alberta and Saskatchewan and sending the money home. Or maybe, there is just a shortage of listings. The demand for houses is small but the supply is even smaller. Take your pick.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik0Xb3aatDf0JAotYmoAV_ztDeD5D8UJ21rIH2E4hD9HI0EyIRrymQ8V4raMCWFpwSWUq4sFYAZqpuzllTSh9z5-B06F9Yqng7_IJEPekXcB62vCpteZPgdpeV3u7TIQ2uerxiOH8dnQzz/s1600/slide1-170.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEik0Xb3aatDf0JAotYmoAV_ztDeD5D8UJ21rIH2E4hD9HI0EyIRrymQ8V4raMCWFpwSWUq4sFYAZqpuzllTSh9z5-B06F9Yqng7_IJEPekXcB62vCpteZPgdpeV3u7TIQ2uerxiOH8dnQzz/s640/slide1-170.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_colouring_book_government/"><b>The Colouring Book Government</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 21, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/austerity/"><span class="s3">austerity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/colouring+book/"><span class="s3">colouring book</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/don+drummond/"><span class="s3">don drummond</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/far+north/"><span class="s3">far north</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/government/"><span class="s3">government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy/"><span class="s3">policy</span></a></span></li>
</ul>
<div class="p4">
The Far North of Ontario and in particular, the Far North Act, has generated a contentious set of policy issues for Ontario's government. For the uninformed, the Far North Act is a process for community-based land use planning and development, that is also setting aside from development an interconnected area of conservation lands of at least 225,000 square kilometres — an area that is about 20 per cent of the landmass of Ontario. To put it into context, it is an area about twice the size of southern Ontario — which represents only about 10 per cent of Ontario’s land mass. There is concern about its impact on the long-term development prospects of Northern Ontario and the First Nations in the Region. A response of the provincial government is that the Act has been misunderstood and needs to be better explained.</div>
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Well, as part of its special initiatives section, the Ontario Ministry of Natural Resources has <a href="http://www.mnr.gov.on.ca/en/Business/FarNorth/2ColumnSubPage/STDPROD_070949.html"><span class="s3">a section on Ontario’s Far North</span></a> that includes a 14 page downloadable colouring book titled “The Far North of Ontario Activity Colouring Book” targeted at ages 4-9. My assumption is that as part of its approach at better explaining the Far North Act, the government is targeting young children in an educational initiative rather than its perception of the average intellectual level of Northern Ontario residents. There are code breaker puzzles with messages like “The Far North is important in the fight against global ….? “, a spot the difference puzzle, word scrambles, mazes, and of course some pages for colouring. I suppose rather than the Eco-Regions Maze which allows you to find your way through four eco-regions, I would have preferred a Northern Development Planning Maze which navigates you through a decades long succession of northern development planning initiatives but in a circular pattern that returns you to where you started.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlYxFaTHHKe5tGcif7ZOkb5fu9LBNEEjWpcX_7uBWfWj1wkEVuVL0Vqk6NSeWR4HRa5nWZfB_kqN6W3bEcu__0YadLAZhu78uG99vuHWH1UnqAnryfMF3MsSOyHpuvRg5ccd0_7PAR-TUi/s1600/preview_colouringbook.jpg" imageanchor="1"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlYxFaTHHKe5tGcif7ZOkb5fu9LBNEEjWpcX_7uBWfWj1wkEVuVL0Vqk6NSeWR4HRa5nWZfB_kqN6W3bEcu__0YadLAZhu78uG99vuHWH1UnqAnryfMF3MsSOyHpuvRg5ccd0_7PAR-TUi/s640/preview_colouringbook.jpg" width="500" /></a></div>
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However, this colouring book is imaginative and no doubt a pilot project for the next special initiative – the Ontario Deficit Fighting Colouring and Activity Book – Suitable for All Ages. On the red and black cover, a cheerful smiling drawing of austerity czar and fitness buff (<a href="http://www.thestar.com/news/canada/politics/article/1119065--don-drummond-reigns-over-ontario-s-introduction-to-austerity"><span class="s3">see Linda Diebel’s story in the Toronto Star article</span></a>) Don Drummond with barber shears in one hand and an axe in the other. On the inside, an encrypted code-breaker puzzle which when solved will provide you with a list of which government ministries get a 30 percent cut, which get a 20 percent and which ministries get a share of the budget savings to augment their priority spending agendas. How about a fiscal projection number search where you try and find estimates of GDP, tax revenue and expenditures for the next decade? Perhaps a spot the difference picture of the three Ontario political party leaders alongside their projected plans for deficit reduction just prior to the last election? Make as many words as you can out of the letters in the phrase “Fiscal Austerity”? How about the “Health Care Maze” where you help take your aging parents through various levels of health care using an imaginary crayon.</div>
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What more can I say? Ontario, Yours to Discover!</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/is_more_talk_the_right_prescript/"><b>Is More Talk the Right Prescription for Northern Ontario?</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 19, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/more+and+more+planning/"><span class="s3">more and more planning</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/norther+growth/"><span class="s3">norther growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/plan+nord/"><span class="s3">plan nord</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/planning/"><span class="s3">planning</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/planning+to+plan/"><span class="s3">planning to plan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/planning+to+the+ends+of+time/"><span class="s3">planning to the ends of time</span></a></span></li>
</ul>
<div class="p4">
Media reports on the visit yesterday by Quebec based consultants who worked on Quebec's Plan Nord appear to have emphasized their prescription for more planning and discussion. The Plan Nord is the Quebec government's parallel to our own Northern Growth Plan and their plan to develop their own north with anticipated investments of 80 billion dollars and the creation of as many as 20,000 jobs. The Mayor of Greenstone was quoted as saying the time for talk had passed and some direct action was needed by the province in getting things going. On the other hand, according to a report on TBNewswatch:</div>
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<i>A pair of Quebec-based consultants, however, have suggested what’s needed is more talk. It’s worked in Quebec, said Yvan Loubier, a senior consultant for National Public Relations in Quebec City, who has worked with both governments and communities in Northern Quebec to help facilitate a 25-year plan for economic salvation in an area hard hit by many of the same concerns afflicting Northern Ontario, particularly First Nations communities. It didn’t come easily, at least not at first.</i></div>
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<i>“More than 450 people discussed together for more than one year, with 60 meetings. At the beginning it was very hard. Some people put it on the table that they had their rights and they had their vision and ‘this is not mine,’” Loubier said.</i></div>
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<i>“But after one year of discussion we reached a very interesting consensus. And this consensus proved to build the measure for the next 25 years.”</i></div>
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Joint Task Force Chairman Iain Angus was quoted as saying that Northern Ontario is still in the planning process, and has not turned to Queen’s Park or the private sector with a cost just yet. </div>
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So, do we need more consultation, more discussion and more planning? If the discussion is with respect to further negotiations with First Nations to bring them onside with respect to northern resource development and negotiate mutually beneficial development and access agreements to get development underway, well certainly. Yet we are still talking about what the plan is supposed to be and what the province is supposed to be doing. Why is the province not devising comprehensive agreements for resource access and revenue sharing with First Nations?</div>
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What seems to be lost here despite the comments made by either Iain Angus or the Quebec consultants is that we have been planning and talking about planning for almost a decade now and all we are doing is still planning. Quebec in a much shorter time span - apparently one year - has developed a plan and set out the costing. They seem to be much more efficient at planning and consultation than we are. No wonder Iain Angus is worried that:</div>
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<i>“Is Plan Nord going to attract investment that otherwise might come here, or are there things we could learn around what they’ve done and apply them to our pilot projects,” Angus said. “That’s the crucial part of this session today.”</i></div>
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By the time we are finished planning with the province, Quebec will likely have finished its twenty-five year Plan Nord. As we all know but seemingly forget, here in the Northwest, in particular since 2003, we have done planning based on the Regional Recovery Initiative, the consultations and information gathering of the Common Voice Initiative, the consultation and recommendations involving the Rosehart Report, followed by the consultations and planning of the Northern Growth Plan which in turn has spawned the Northwestern Regional Economic Zone Planning Initiative of the Joint Task Force. After almost a decade, we are still planning and planning to plan and consulting on the next steps for our plan and yet are no closer to costing out and devising the infrastructure to access the Ring of Fire or the institutional mechanisms required to deal with the concerns of and make joint decisions with the First Nations. Apparently, that will come in time. It would appear that time is considered an abundant and unlimited resource here in Northwestern Ontario and affords us the luxury of planning to the ends of time. Why does this make me nervous?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_ontario_is_to_southern_/"><b>Northern Ontario is to Southern Ontario is as Canada is to the United States – Well, almost…</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 17, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s3">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/paralellels/"><span class="s3">paralellels</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/southern+ontario/"><span class="s3">southern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s3">united states</span></a></span></li>
</ul>
<div class="p4">
Prime Minister Stephen Harper’s recent comment that he does not want the future of the Northern Gateway pipeline to be decided by “certain” people in the United States who would like Canada to be one giant national park was remarkable in its parallels to the economic development situation in Northern Ontario. In the case of the Northern Gateway, along with opposition from environmental groups and some First Nations in Alberta and British Columbia, a number of U.S. based environmental groups accompanied by some Hollywood celebrities have voiced opposition to the plan. In Northern Ontario, there have been complaints that the Far North Act and the Endangered Species Act will hinder northern development because of the wish of environmental groups in southern Ontario to turn the north into a vast provincial park.</div>
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The parallels are intriguing. The relationship between Northern Ontario and the south is remarkably similar to that between Canada and the United Canada. Relative to the United States, Canada is natural resource intensive and sparsely populated. It is generally out of sight and out of mind for most of the U.S. public except when we send them a blast of cold Arctic air or make some strange noises in the media. Relative to southern Ontario, Northern Ontario is also natural resource intensive with the south being capital intensive and more densely populated as well as more urban. The North is also generally not on the radar of either the public or politicians in the south. Canada seems to feel ignored by the United States while Northern Ontarians feel alienated from the south. </div>
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Yet, there are also some important differences. About 90 percent of Canada’s population lives within about 100 miles of the U.S. border - the same cannot be said for the population of northern Ontario with respect to the province’s south. As well, 80 percent of the north’s resource exports do not go to southern Ontario – they go to the rest of the world – and primarily the United States. Finally, northern Ontario is politically part of Ontario while Canada is politically separate from the United States. As a result, if Canada feels that the United States is trying to turn it into a big park, its status and powers as a sovereign nation allows it to make decisions to try and counter this – such as trying to find other customers for its natural resource products. If Northern Ontario feels the south is trying to turn it into a giant park, well there is not much it can do because it has not the status, institutions or powers to influence its own economic and political direction. </div>
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While Canada may be an economic dependency of the United States based on the fact that 80 percent of its exports go there, it can take political action to deal with its economic interests. Northern Ontario’s resource economy is dependent on international markets but it cannot take any direct political action to deal with any of its economic concerns – it is dependent on Queen’s Park to address its needs and getting Queen’s Park’s attention is hard work. We spend a great deal of our time lobbying politicians, civil servants and interest groups in Toronto and as a result our regional economic culture has evolved not into an entrepreneurial culture but a culture of planning, supplication and bureaucracy. The impact of all this on Northern Ontario’s long-term economic future is incalculable.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ems_stations___response_times__c/"><b>EMS Stations & Response Times: Centralized If Necessary but not Necessarily Centralized?</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 17, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/capital+cost/"><span class="s3">capital cost</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/decentralization/"><span class="s3">decentralization</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ems/"><span class="s3">ems</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/shared+facilities/"><span class="s3">shared facilities</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/station+locations/"><span class="s3">station locations</span></a></span></li>
</ul>
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In providing municipal services as in buying real estate, location is everything. Nevertheless, I must admit I’m a little perplexed with the evolution of EMS facilities in Thunder Bay. As we all know, there is an impressive new Superior North EMS headquarters being built along Junot Avenue at the cost of 11 million dollars. Along with serving as an administrative headquarters, this facility will also house ambulances and paramedics for Thunder Bay and according to EMS Chief Norm Gale will help with response times for the north half of the city. </div>
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On Monday evening, City Council approved a 7 million dollar request for the construction of two new fire halls and for funds that will also be used to renovate four existing fire halls to share fire and EMS services. This new plan would see the Neebing Avenue fire station rebuilt in its existing location and the Brown Street firehall in Westfort relocated to a location still to be confirmed but which many suspect will be the corner of Rosslyn Road and Neebing Avenue. The point here is to improve EMS response times on the City’s south half. </div>
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This is a lot of new capital construction which will no doubt benefit local contractors. What is curious is the sudden discovery that we can improve response times by decentralizing the ambulances and having them share accommodation with existing fire station facilities. Of course, my recollection was at the time the new EMS headquarters was being debated, the idea of improving response times by sharing EMS facilities with existing fire stations did not appear to have had a lot of traction. All of a sudden, once the new headquarters is near completion, we have a proposal for a new cost-effective decentralized delivery service that will improve response times. </div>
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Perhaps, I am missing something here but would it not have made more sense to have shared fire and EMS facilities before building expensive new headquarters? Indeed, such an innovation might have reduced the scale and cost of the project being built on Junot. As well, the irony of having to build the new headquarters away from the fire station on Junot because of the protests of nearby residents about the noise from ambulances and now having those "noisy" ambulances near residential neighborhoods at fire stations across the city is probably lost on our municipal councilors. </div>
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One more point. Since we are so concerned with response times, has anyone worked out what happens to fire response time in Westfort once the Brown Street station is moved? If I recall correctly, there are railway tracks north of Westfort and railway tracks south with only the James Street underpass providing an route that does not require a stop at a level crossing. How will this affect response times in this area if all the nearest fire stations to the Westfort area are on the other side of a set of train tracks? Has anyone worked out how much longer it would take to get to a Westfort fire if trains are winding their way through at the same time that there is a fire call? Unlikely to happen? Perhaps. But it is something to think about.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_job_creation_story/"><b>A Job Creation Story</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 16, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+growth/"><span class="s3">economic growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/per+capita+gdp/"><span class="s3">per capita gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/private+sector/"><span class="s3">private sector</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/private+sector+employment/"><span class="s3">private sector employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/wealth+creation/"><span class="s3">wealth creation</span></a></span></li>
</ul>
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Economics is really a form a story telling and this post is a job creation story with three pictures. The first picture (Fig1) shows how Ontario's real per capita GDP growth was relatively robust between 1993 and 2000 and then slowed down dramatically over the period 2000 to 2010. Even with the recession of the early 1990s, real per capita GDP in Ontario between 1990 and 2000 rose by 19 percent. However, the period from 2000 to 2010 saw only a two percent increase in real per capita GDP. The second picture (Fig2) uses Statistics Canada employment data for Ontario and presents the private sector share of total employment from 1987 to 2011. Over the period 1992 to 2000, the share rose from 78 to almost 84 percent but then after 2000 began to drop. While the private sector share of employment can drop during a recession - as it did during the early 1990s in this graph - in Ontario, it dropped steadily from 2000 to 2010 - there is a little upward bump in 2011. The third picture (Fig3) plots the annual growth rate of Ontario's real per capita GDP against the private sector employment share and finds that there is a positive correlation between the two variables. Indeed, fitting a straight line to the data points using a simple linear regression reveals that just over 20 percent of the variation in real per capita GDP can be ascribed to the private sector share of employment. The moral of the story is that the size of the private sector's employment share is indeed an important factor in generating growth in the economy. While it is of course not the only factor (there is another 80 percent that is unexplained - perhaps things like tax rates, interest rates, exchange rates, human capital, public infrastructure, etc...) it is nevertheless a factor and a society that loses sight of its role in economic growth and wealth creation will likely see poor economic performance. The end.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/forecasting_thunder_bay%E2%80%99s_gdp_/"><b>Forecasting Thunder Bay’s GDP Growth Rate</b></a></div>
<ul class="ul1">
<li class="li8">Jan 15, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conference+board/"><span class="s3">conference board</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/estimates/"><span class="s3">estimates</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/forecast/"><span class="s3">forecast</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp+growth/"><span class="s3">gdp growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></li>
</ul>
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Thunder Bay received a shot of good news last week as the Conference Board of Canada released its Metropolitan Outlook for Winter 2012 and forecast that for 2012, Thunder Bay’s real GDP was forecast to rise 1.7 percent this year, the most in 12 years. According to the Conference Board Report:</div>
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Thunder Bay’s gross domestic product is estimated to have remained unchanged in 2011, following 0.9 per cent growth in 2010. These two years of not shrinking were nonetheless a small triumph for an economy that contracted in seven of the prior nine years, largely because of weakness in the forest industry.</div>
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The report painted a picture of a city that according to the Thunder Bay Chronicle-Journal:</div>
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…would appear to profile a city holding its own, growing in some areas, while in transition — which is pretty good considering the state of the economy as a whole.</div>
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While this is all excellent, news, the one caveat is that these are forecasts and forecasts are subject to revision. Indeed, a brief glance at some of the Conference Board’s forecasts for Thunder Bay over the last few years suggest that the revisions are frequent and can be quite large. This is to be expected given the small size of many of the urban economies the Conference Board is dealing with in these forecasts, which can make them more variable and sensitive to local shocks and conditions.</div>
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The accompanying table gives you some indication of what I mean. I took a look at five Metropolitan Outlooks from the Conference Board starting with the Winter 2006 Report. The <b>bolded</b> numbers in the table are the growth rate forecasts while the non-bolded are estimates of the actual growth rate for that year. Winter 2008, for example, estimated positive real GDP growth rates for Thunder Bay the entire period stretching from 2008 to 2012 ranging from 0.7 percent in 2008 to 1.5 percent in 2011. </div>
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Look at what eventually happened in some of these years. Take the forecast for 2009 – albeit a bad year given the recession and world financial crisis. From a projected growth rate of 1.3 percent in 2008, the forecast dropped to -3.1 percent in 2009 and the actual estimate –which is also subject to revision – ranges anywhere from -4.7 percent to -5.0 percent. If you look at 2010, forecasts of 1.4 and 1.5 percent growth have become estimates of 0.6 to 0.9. For 2011, the Conference Board was predicting rates as high as 1.9 percent in 2010 but the first estimate in Winter 2012 says at best the economy stayed put at 0 percent growth.</div>
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Despite the optimistic forecasts of real GDP growth year after year, Thunder Bay’s real output has declined if you use the Conference Board estimates. In 2005, real GDP in 2002 dollars would have been 4.241 billion dollars while for 2011 it is estimated at 3.806 – a decline of about 10.3 percent. So why is Thunder Bay doing as well as it is? Well, income per capita is actually growing faster than real GDP. Why? Per capita income includes government transfer income in the form of pensions and other type of income support. The question is for how long can the economy rely on injections of public sector life support rather than increases in real output?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/gambling_and_the_economy/"><b>Gambling and the Economy</b></a></div>
<ul class="ul1">
<li class="li8">Jan 15, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/casinos/"><span class="s3">casinos</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gambling/"><span class="s3">gambling</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/investment+firms/"><span class="s3">investment firms</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/toronto/"><span class="s3">toronto</span></a></li>
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Two stories in the Toronto Star this week have left me wondering if there is a new grand strategy at work for transforming Ontario’s economy in the wake of its manufacturing decline.</div>
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First, there was a story on the latest rumor that Toronto is set to get a waterfront casino at Ontario Place. For me this generated visions of children playing amongst the games and amusements, while their parents are trying to double their RESP money at the slot machines. While the story is being downplayed by the government, according to the Toronto Star, a spokesman for the Finance Minister is quoted as saying: “The province does not plan on making a decision until it receives the land-based gaming review or report from the lottery corp. Without a specific proposal, this is all just speculation.” Of course, this all leads me to wonder if there is a plan to get a proposal underway.</div>
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Second, there was a story that funding lawsuits is growing as an investment activity and a more formal practice is emerging whereby plaintiffs with strong cases but a lack of resources can approach investment firms to pay their legal bills in return for a share of the settlement. They provide an example of the U.S. Burford Group, which invested 6 million dollars in legal fees in a case last year and then earned 10.5 million dollars as part of the payout. However, there are risks to such a strategy and as Burford Group apparently says in a report on its website, “the very best trial lawyers will acknowledge that luck and circumstance play a role here.” Of course if luck and circumstance play a role then even plaintiffs with weak cases have a fair shot. This seems to me to be another form of legalized gambling. Given the concentration of legal and investment firms in Ontario and particularly Toronto, this may also seem like another new economic growth frontier.</div>
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What is my point? If these kinds of activities are what the sovereign consumer wants to pay for, then they are forms of economic activity and will create jobs. We can go back to Mandeville’s Fable of the Bees for instruction on how vice and misery can become engines of economy. At the same time, I find all this disquieting. The Ontario government has come to derive greater amounts of revenue from gambling and lotteries and it represents a form of voluntary taxation. More serious are the lessons that are being passed on to younger generations with the creation and propagation of a “gambling culture” that is sanctioned by the state. The ethos of society seems to have changed from one where skills, hard work and entrepreneurship generate success to one where luck and chance are the road to wealth. </div>
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While much of the hand we are dealt in life is luck, skills and hard work are also necessary to deal with opportunities as they come and those activities must be invested in also. Reliance on chance alone is not a stable foundation to build the future. With gambling, wealth and income are transferred from gambling losers to winners and once the tax revenues accrue to government and are spent, there is also some transfer from gamblers to non-gamblers. The question. Does this type of activity actually increase the net wealth, income and welfare of a society or is it merely a transfer from winners to losers? Is the gambling economy a zero-sum economy?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_winn_3/"><b>Northern Economist in the Winnipeg Free Press</b></a></div>
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<li class="li3"><span class="s1">Jan 12, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2004+health+accord/"><span class="s3">2004 health accord</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/2014/"><span class="s3">2014</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+government/"><span class="s3">federal government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+spending/"><span class="s3">health spending</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+transfers/"><span class="s3">health transfers</span></a></span></li>
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<a href="http://www.winnipegfreepress.com/opinion/westview"><b>The View from the West</b></a></div>
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From the January 11th Winnipeg Free Press - PRINT EDITION</div>
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<b>Health transfer reforms sound</b></div>
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by Livio Di Matteo</div>
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Just before Christmas, the federal government provided its solution to the 2014 expiration of the 2004 Health Transfer Accord.</div>
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Finance Minister Jim Flaherty announced to assembled provincial finance ministers not that they would begin discussing a new arrangement but that the federal government had decided to hold the annual increase in the transfer to six per cent until 2016-17, which is the current rate Ottawa gives the provinces.</div>
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Starting in 2017-18, however, federal health-transfer increases will be linked to the rate of the country's economic growth including inflation -- which is about four per cent but there will be a floor of three per cent.</div>
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There is much that can be criticized about this solution to the health-transfer issue. It appears to herald a departure of the federal government from any attempt at national health standards or fostering innovation as the money is to be transferred no strings attached.</div>
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Thus, there is no federal commitment to try to improve health-care delivery. Federal Health Minister Leona Aglukkaq has stated future federal-provincial discussions will now be more about performance measurement, accountability and sharing of best practices rather than money.</div>
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When it comes to health, critics might argue Canada now has the federation from Star Trek with the role of the federal government being simply to observe and report rather than involve itself in provincial affairs.</div>
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At the same time, one has to conclude that given that health is a provincial sphere of jurisdiction, the federal transfer solution is both clever and sound.</div>
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In terms of cleverness, announcing the new arrangement the week before Christmas when the public's attention was elsewhere was inspired.</div>
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And if they were paying any attention they would merely note Ottawa was giving money -- the Christmas gift that is always appreciated -- making complainers seem ungrateful.</div>
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Moreover, Ottawa is maintaining six per cent increases until 2017 -- the world should last so long. The fact is the provinces have stable federal funding to plan for the day when growth in federal transfers slows.</div>
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Federal health transfers are a key component of provincial health spending, accounting for about 20 per cent of their expenditures and are therefore an important driver of spending.</div>
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The federal government is creating the incentive for provinces to bend the health-care cost curve but gradually and without a one-size-fits-all policy.</div>
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One of the advantages of a federal form of government is that it can foster diversity and innovation in the production and delivery of public services. The provinces now have the opportunity to do just that to health care.</div>
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The money, however, is being transferred with no strings attached, no push for national standards. Those who might want to see future federal action on a national drug plan will be disappointed. Those who see the role of the federal government as an enforcer of regional equity in health-care services will also be disappointed.</div>
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Those provinces currently unhappy with the new transfer deal, however, would also cry lamentations of domineering federalism and unwarranted federal intrusion if the federal government became more interventionist in applying national heath standards.</div>
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The federal government has extricated itself from these types of political health funding operas and in future all the provinces will be more careful about what they wish for.</div>
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Finally, the amounts are reasonable. Six per cent until 2017 means five more years of federal transfer growth well in excess of GDP growth.</div>
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Of course, given population growth and inflation, it means a freeze in real per capita federal health transfers after 2017.</div>
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This is where the challenge lies. For provinces with booming economies and relatively young populations, a freeze in real per capita federal health transfers will allow innovation and experimentation. For provinces with rapidly aging populations and slower economic growth -- Eastern Canada -- the result will be a serious fiscal crunch.</div>
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Ontario and Quebec already have extremely challenging deficit and debt situations and they now see an express train rather than light heading towards them at the end of the fiscal tunnel. All this will be in keeping with the new vision for Canadian federalism -- one stable federal funding source with provincial freedom to experience diverse outcomes.</div>
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Livio Di Matteo is professor of economics at Lakehead University.</div>
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Republished from the Winnipeg Free Press print edition January 11, 2012 A11</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_tale_of_two_deficits/"><b>A Tale of Two Deficits</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 11, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/don+drummond/"><span class="s3">don drummond</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/expenditure+reduction/"><span class="s3">expenditure reduction</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+government/"><span class="s3">federal government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policies/"><span class="s3">policies</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxes/"><span class="s3">taxes</span></a></span></li>
</ul>
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The federal government and Canada’s largest province are both engaged in deficit reduction planning exercises for their spring 2012 budgets. The Federal government according to its June budget has expenditures of about 281 billion dollars and revenues of 249 billion for a deficit of about 32 billion dollars. Ontario, based on its last budget, has expenditures of about 124 billion and revenues of almost 109 billion for a deficit of about 16 billion dollars. While Ottawa’s deficit is just under two percent of Canada’s GDP, Ontario’s is just over two percent of provincial GDP. </div>
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The way to fight a deficit is to either raise revenues or reduce expenditures or some combination of the two. The Federal and Ontario governments have both publicly opted to focus on expenditure reduction. Ottawa is engaged in a review exercise that aims to cut 5-10 percent in spending across departments. Indeed, the Federal Finance Minister on Tuesday hinted that the government might be compelled to be more aggressive and some of the cuts might be more than 10 percent. Ontario, has engaged the services of former bank economist Don Drummond to provide recommendations on government spending. Preliminary reports in the media outline cuts as high as 30 percent for some Ontario ministries with health and education being priorities and somewhat spared.</div>
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In the case of the federal government, a 10 percent reduction of spending across the board would generate 28 billion dollars and would quickly balance the budget especially given that revenues were forecast to rise to 264 billion in 2012-13 and 281 billion by 2013-14. While the economic growth outlook is now more uncertain, federal government revenues are not anticipated to decline. As for Ontario, a 10 percent cut would also nearly balance its budget if spread across the board but Ontario has said that education and health are priorities. </div>
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About 38 percent of Ontario’s spending or 47.6 billion dollars is health and 19 percent or 23.2 billion dollars is education. Another 10.3 billion (8 percent) is interest on the debt. Adding these components up brings you to 81 billion dollars, which leaves only another 43 billion dollars in spending. Cutting this remaining spending by 30 percent – post-secondary education and training, children and social services, justice, transportation and all other programs – would just about balance the budget. But it is unrealistic to expect such a dramatic reduction in these categories. </div>
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Even a ten percent drop in government spending all at once is a significant and painful cut. Yet, both governments have avoided talking about the revenue side of the deficit reduction equation to mitigate the effects of spending reduction. What is instructive here is that if one examines the total government revenue to GDP ratio for the Federal government and Ontario, the ratio has been falling for Ottawa over the last decade but it has grown for Ontario. Between 2000 and 2011, Ottawa’s revenue to GDP ratio declined from approximately 18 to below 15 percent while Ontario’s grew from about 15 to 17 percent. However, Ontario’s revenue includes federal transfers, which now account for about twenty percent of its revenues. Its own source revenue to GDP ratio is now actually similar to that of the Federal government but it rose over the first half decade of the 21<span class="s4"><sup>st</sup></span> century and then declined during the recession.</div>
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Of the two jurisdictions, Ontario has the more serious deficit problem. First, it is dependent for twenty percent of its revenues on the federal government. While the federal government does not appear to have targeted transfer payments for expenditure reduction, it may become a concern. Second, Ontario has vowed to protect health and education, which leaves a much smaller base for expenditure reduction. The federal government has a broader base on which to apply its expenditure reduction though much of it is also transfer payments to individuals and it remains to be seen how it will deal with these. Third, given its slow economic growth and lagging productivity, raising taxes would be viewed by Ontario’s business community as a poor economic move. Given the decline in its revenue to GDP ratio, Ottawa is actually in better shape to raise taxes to fight the deficit but it is even more strongly committed to not raising taxes. This leaves both Ottawa and Ontario with limited room to maneuver. We await the outcome of the fiscal spring.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/why_is_ontario_s_government_pani/"><b>Why is Ontario's Government Panicking About the Deficit?</b></a></div>
<ul class="ul1">
<li class="li8">Jan 8, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/don+drummond/"><span class="s3">don drummond</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/panic/"><span class="s3">panic</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/political+posturing/"><span class="s3">political posturing</span></a></li>
</ul>
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The Ontario government’s final approach to deficit reduction has begun with selected leaks of economist Don Drummond’s “first draft” of his review via media interviews designed to dramatically present deficit reduction. A column by Martin Regg Cohn of the Toronto Star titled “Brace for a firestorm across Ontario” outlines cuts as high as 30 percent for some Ontario ministries with health and education being spared “somewhat”. Yet, the same column has Don Drummond using the language of the Wall Street protestors by talking about how just one percent of the population accounts for half of hospital spending and one third of total health expenditures. Martin Regg Cohn’s most recent column on Don Drummond’s prescriptions titled “The grim reaper punctures Ontario’s fiscal fantasies” points out how unrealistic balancing the budget by 2017-18 was and shares the blame on fiscal forecasting by mentioning that the opposition parties embraced the same timetable during the election.</div>
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What is going on here? All of this advance work by the Ontario government reduces what should be a serious policy problem requiring a firm and measured approach to some kind of fiscal porn reality show. What’s next? Blaming 80 year-old cancer patients as the top 1 percent of health care spenders with cabinet ministers leading a protest movement to occupy hospital wards? The provincial government is being irresponsible by launching this media blitzkrieg in an effort to soften up the public for spending cuts that will be more modest than what Don Drummond is going to propose. In a sense, the provincial government is trading a leadership role on the deficit for what can only be termed a panicked posturing scaremonger approach designed to make them look benevolent when the cuts are not as draconian as their special adviser wanted them. At a time when sound policy is required, the provincial government should be ashamed for engaging in such a childish and irresponsible posturing in its approach to the public finances.</div>
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Ontario currently has expenditures of about 124 billion and revenues of almost 109 billion for a deficit of about 16 billion dollars. Of this spending, 38 percent or 47.6 billion dollars is health and 19 percent or 23.2 billion dollars is education. Another 10.3 billion (8 percent) is interest on the debt. Adding these components up brings you to 81 billion dollars, which leaves another 43 billion dollars in spending. Cutting this remaining spending by 30 percent – post-secondary and training, children and social services, justice, transportation and all other programs – would just about balance the budget. That is not going to happen. Restoring fiscal balance will require a balanced approach that affects all sectors. What should the government do?</div>
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Step one. There needs to be an immediate two-year freeze in total nominal provincial government spending – with inflation and population growth – this is effectively a real cut of six percent over the two years. If spending stays frozen at 124 billion and total revenue grows at 3 percent (it averaged 4.7 percent from 2001 to 2011 which includes the recession slowdown so we are indeed underestimating revenue growth here especially if the government does not raise taxes) in about two years the deficit would be down to about 6 billion dollars. A freeze entails real reductions, but not the operatic drama being bandied about by the government.</div>
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Step Two. During the two years of the freeze, the recommendations of Mr. Drummond need to be examined and evaluated for where there may indeed be measures to reduce spending in all sectors of government. Indeed, no sectors should be spared. Are there savings in health? Most models of health expenditure determinants I’ve looked at explain about 90 percent of provincial government health spending with income, federal transfers, aging, population growth and technology (as proxied by time trend). The other 10 percent or the residual is “unexplained”. Could it be inefficiency? Possibly. Is there 5 to 10 percent in inefficiency in most areas of provincial government spending? Perhaps. Do your homework and set an expenditure reduction target for the two years after the freeze that would take another 5 percent off of government spending via restructuring and reform of services by 2016-17. This would bring total annual provincial spending down by about 6 billion dollars to about 118 billion dollars. Assuming the revenue increases outlined above, this would effectively balance the budget by the target date and it would not be painless given inflation and population growth.</div>
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Step three. Rein in political ambition to resume "exciting" new spending initiatives once the finances start to improve. As dire as the province’s finances look, a freeze in spending combining with very modest revenue growth will start to improve the province’s finances more quickly than expected. As revenues improve, maintain the spending restraint plan and dedicate some of the additional revenues to paying down the debt. For each billion dollars of debt that is paid down, you will free up additional resources in terms of reduced debt servicing costs. Use this fiscal dividend to further reduce the provincial debt rather than plow it back into spending. </div>
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Ontario needs a solid and stable plan to address its fiscal situation and one that balances the need for government services with the necessity of providing them efficiently. The plan requires the cooperation of all the political parties as well as the public and grand political opera designed to terrorize the public and the opposition is not the way to do it. The province of Ontario needs to demonstrate to its citizens and to bond rating agencies that it has a serious plan to balance the budget, and not a strategy designed to yield partisan political benefits. Exercise some leadership.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/taxes__user_fees___municipal_pol/"><b>Taxes, User Fees & Municipal Politicians: It Takes More than Two to Do the City Budget Tango</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 8, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2012+budget/"><span class="s3">2012 budget</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/increases/"><span class="s3">increases</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxes/"><span class="s3">taxes</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxpayer+burden/"><span class="s3">taxpayer burden</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/user+fees/"><span class="s3">user fees</span></a></span></li>
</ul>
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The 2012 budget for the City of Thunder Bay is shaping up to be a very interesting and watershed set of discussions. Over the period 1999-2010, the average annual growth rate in residential tax property revenues has been 5.1 percent. That for business property tax revenues has been 1.6% while user fee revenues (which include the water bill) has been 6.6 percent. </div>
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Despite these revenue increases, the demands for more spending have been incessant. For 2012, the City Police and the District Social Service Board are each asking for increases of more than one million dollars in their budgets while the Superior North EMS says it needs a new ambulance service, which will also cost one million dollars. Thunder Bay Fire and Rescue wants to implement a plan for new fire stations, which is on top of several million dollars in new infrastructure spending. To top it all off, while the decision to build the multiplex has yet to be made, money is being spent on planning for it and the plan is to “leverage funding” for it once it is built – which could ultimately mean borrowing more. </div>
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City Council has been rather strategic in its behaviour towards raising taxes for 2012. The fall saw a discussion over a property tax increase to deal with infrastructure under the rubric of Renew Thunder Bay and resulted in a planned 1.5 percent increase in property taxes to deal with infrastructure. That out of the way, the debate is now over what additional increase is needed to deal with everything with at least one city councilor mentioning in a recent media story that while a zero percent increase in unrealistic, the hope was that the jump would be less than 1.5 percent. </div>
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City councilors must no doubt be congratulating themselves on their cleverness. After all, the debate has now been structured over whether the increase is going to be 1 or 1.5 or perhaps 2 percent which may not sound so bad except it is on top of the 1.5 percent increase that is already planned and probably does not include increases in fees for things like water. This type of compartmentalization into separate revenue categories – each of which results in a small increase – must assume that the average municipal citizen is rather short sighted if not innumerate. Once you add everything up, the average household will likely see increases in payments to the City of Thunder Bay ranging anywhere from 3 to 6 percent next year. It is indeed an elaborate dance of a thousand tax increases that our municipal councilors have begun to dance as they debate bits and pieces and hope nobody notices the big picture. Some of these component items have increased substantially.</div>
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Take the example of the water bill. I decided to go back and look at my household water bills for the last decade – the period 2000-2011. The bill is divided into three components – a consumption charge, a sewer charge and a fixed cost which it turns out has been anything but fixed lately. Our consumption of water has been flat aside from the spike in 2002 (there was a leaky toilet that year which we then fixed). We’ve averaged about 241 cubic meters per year over the period 2000 to 2011 with no discernible upward trend.</div>
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Figure 1 shows the component charges for my water bill. They have all gone up over time. Over the period 2000 to 2011, my consumption charge has increased 62 percent, my sewer charge 152 percent and my “fixed cost” by 337 percent. Figure 2 adds all the charges up and between 2000 and 2011, my annual water bill has increased by 134 percent. I suspect that this pattern is common to most households in the city. Indeed, most households are probably afraid to consume less water and conserve because it would result in a revenue drop that would result in yet another rate increase, which our municipal overlords could creatively title the “Revenue Recovery Charge”. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNh-jnhDPZDu5Np8IInKtn_1Yooi6QY8BDxbMKuqRyqqdcmFlT_MKEgY11Dit-fk6Gv32tG8xKtJrUUAeYVvnT12cchsL1qeRi4x6etLO2vYP36uKEFtIfnMVI7BG8qBm-6H8hz8W3bZkD/s1600/slide1-167.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhNh-jnhDPZDu5Np8IInKtn_1Yooi6QY8BDxbMKuqRyqqdcmFlT_MKEgY11Dit-fk6Gv32tG8xKtJrUUAeYVvnT12cchsL1qeRi4x6etLO2vYP36uKEFtIfnMVI7BG8qBm-6H8hz8W3bZkD/s640/slide1-167.jpg" width="640" /></a></div>
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Now to be fair, it can be argued that we were underpaying for water in the past as Canada in general has had some of the cheapest water rates in the world. But then, we do have a resource advantage in terms of the abundance of water. Also, building a new water treatment facility and modernizing our water system are also factors. We are paying for new infrastructure. Of course, that is why the call to renew yet more city infrastructure is so alarming given what has happened in the case of water. When it comes to municipal revenue and taxation, city councilors have created a tango of many fees and funds each of which results in an incremental increase but there is ultimately only one taxpayer footing the bill for these many separate fees. Who among our city councilors is looking out for the bigger picture when it comes to the impact on the average household?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/more_northern_labour_statistics/"><b>More Northern Labour Statistics</b></a></div>
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<li class="li8">Jan 6, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s3">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recent+trends./"><span class="s3">recent trends.</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s3">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></li>
</ul>
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Statistics Canada has released its l<a href="http://www.statcan.gc.ca/daily-quotidien/120106/dq120106a-eng.htm"><span class="s3">abour market numbers for December 2011</span></a> and they show that for Canada, the level of employment rose slightly between November and December, up by 18,000. The unemployment rate also increased to 7.5% as more people participated in the labour market. Over the past 12 months, employment growth totaled 1.2% (+199,000), but with nearly all of the gains in the first half of the year - the second half of 2011 has witnessed a slowdown in job creation nationally.</div>
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In Ontario, employment was up by 16,000, bringing growth since December 2010 to 1.4% (+91,000) and the unemployment rate in the province was 7.7% in December, down 0.2 percentage points from a month earlier. For December 2011, the unemployment rate in Greater Sudbury was 5% - down from 5.2% in November. Meanwhile, the unemployment rate in Thunder Bay was 6.1 percent - up from 5.9 percent in November based on 3-month moving average, not seasonally adjusted numbers. </div>
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According to the recent numbers (Series v53525376 & v53525106), total employment in Greater Sudbury was actually down by 700 jobs between November and December 2011. In Thunder Bay, it was actually up by 1000 jobs - from 62100 to 63100. Relative to December 2010, Sudbury is up by 1000 jobs (from 82800 to 83800) while Thunder Bay is up 2100 jobs from 61000 to 63100). The fact that the unemployment rate in Sudbury has gone down between November and December 2011 despite the employment decline while the reverse has happened in Thunder Bay is because of labour supply differences in the two markets relative to employment. In Thunder Bay, the labour force has been growing faster than employment. As well, if you take the Ontario number of 91,000 jobs created since December 2010, the Thunder Bay CMA appears to have created 2.3 percent of them, which is well above its population share of the province.</div>
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In terms of longer term trends, the accompanying figure shows that despite recent improvements, employment levels in Thunder Bay have nevertheless trended flat over the last fifteen years while those in Sudbury exhibit an overall upward trend.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjg_0Dltwd4qHNse51MKrCHKWQpIwWDfLhvueFy2dpmwSWdz0RYXxSqzwZuOkDBp11gFL5oubn_M3MagqaLYpZTXll9fjIPY-ldx7GAQGxfh-Wl_X4d-0Fl5WNHHEiK0cdCQ3wTQmyyDluS/s1600/slide1-166-1.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjg_0Dltwd4qHNse51MKrCHKWQpIwWDfLhvueFy2dpmwSWdz0RYXxSqzwZuOkDBp11gFL5oubn_M3MagqaLYpZTXll9fjIPY-ldx7GAQGxfh-Wl_X4d-0Fl5WNHHEiK0cdCQ3wTQmyyDluS/s640/slide1-166-1.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_help_wanted_index_do/"><b>Thunder Bay Help Wanted Index Down (but Sudbury Up)</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 4, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conference+board/"><span class="s3">conference board</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/help+wanted+index/"><span class="s3">help wanted index</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/labour+market/"><span class="s3">labour market</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s3">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></span></li>
</ul>
<div class="p4">
The Conference Board of Canada recently released its December 2011 Metro Help Wanted Index. According to the Conference Board, the Help Wanted Index suggests that employment prospects are about to improve in many Canadian metropolitan centers. More specifically, near term prospects are up in 14 census metropolitan areas, stable in 6 and down in 6. Among the ones that are down are Saguenay, Quebec City, Thunder Bay, Trois-Rivieres, Ottawa-Gatineau and London. Prospects are up the most in western Canadian cities where rising resource prices are driving up employment. The index of labour market tightness - a measure of the number of unemployed workers to the number of online job ads - is the lowest is western Canadian CMAs.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNXvZE4JOB0JQUm1dzgJOJK_so62BNl4ESOM27ouBHIPezxinqc6IjQIM6_yAywRgQ4w8_hTy7jCFAJaKmn255D6pzu4BKoS7V9K70u-SrxnBG1xawos3gGyst6AzQBf3kdvEj1j5pil_x/s1600/Unknown-1.png" imageanchor="1"><img border="0" height="402" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNXvZE4JOB0JQUm1dzgJOJK_so62BNl4ESOM27ouBHIPezxinqc6IjQIM6_yAywRgQ4w8_hTy7jCFAJaKmn255D6pzu4BKoS7V9K70u-SrxnBG1xawos3gGyst6AzQBf3kdvEj1j5pil_x/s640/Unknown-1.png" width="640" /></a></div>
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The above figure shows the Conference Board Help Wanted Index for Thunder Bay (black line) and the Index of Labour Market Tightness (green line) since November 2008. A rising help wanted index means the number of job ads is increasing while a falling labour market tightness index means the probability of finding a job is rising. For Thunder Bay, the period since 2009 has generally been marked by a rising help-wanted index and a tightening labour market despite the most recent reversal. Given that total employment in Thunder Bay as reported by Statistics Canada has not returned to the levels of 2003 - before the onset of the forest sector crisis - this provides further evidence that the Thunder Bay labour market has adjusted to a lower employment level equilibrium. </div>
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In case you are interested, the other major northern Ontario metropolis - Sudbury - saw an increase in its most recent help wanted index - but just barely.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEUAeiOXM0T4st2OJq2eUN01vEIgC07Z2gLoVh8SadzRBmcx3nZLKQb36Ise3Dbf39opdYmPB9kHBBvvd-oOHzmkkXv1_0SlS1nLctG7MFANXnjynwROTib76sUwNZt79zvSK1o3LehYJA/s1600/Unknown-2.png" imageanchor="1"><img border="0" height="419" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhEUAeiOXM0T4st2OJq2eUN01vEIgC07Z2gLoVh8SadzRBmcx3nZLKQb36Ise3Dbf39opdYmPB9kHBBvvd-oOHzmkkXv1_0SlS1nLctG7MFANXnjynwROTib76sUwNZt79zvSK1o3LehYJA/s640/Unknown-2.png" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/apparently__there_is_no_delta_ho/"><b>Apparently, there is no Delta hotel in Thunder Bay!</b></a></div>
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<li class="li8">Jan 4, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/delta/"><span class="s3">delta</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/waterfront+hotel/"><span class="s3">waterfront hotel</span></a></li>
</ul>
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Well, my recent January 2nd post on the apparent mix-up on the Canada Entertainment web site stating that there is a Delta Hotel in Thunder Bay has caught the attention of no other than Delta Hotels. According to an e-mail received from Sandy Indig, the public relations manager at Delta hotels and Resorts, they wanted to let me know that:</div>
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<i>"we have reached out to www.canadaentertainment.ca and have asked them to revise their Delta posting as they have clearly confused the cities of Victoria and Thunder Bay. Delta does not have a property in Thunder Bay...the site you have linked to in your blog is referencing our resort in Victoria, BC - the Delta Victoria Ocean Pointe Resort and Spa."</i></div>
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Sandy Indig proceeds to thank Northern Economist for bringing this to their attention and expects canadaentertainment.ca to revise their web site shortly. Northern Economist is of course pleased to once again be of service but is a bit disappointed that there will not be cherry blossoms and daffodils on the waterfront anytime soon. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/state_of_the_northwest_2012/"><b>State of the Northwest 2012</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jan 3, 2012</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2012/"><span class="s3">2012</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s3">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s3">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/region/"><span class="s3">region</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/regional+government/"><span class="s3">regional government</span></a></span></li>
</ul>
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As 2012 dawns, Ontario’s Northwest begins another year of change and anticipation of change. On the economic front, the slow process of stabilization and renewal will continue. There is substantial construction activity underway in the region and particularly in Thunder Bay driven to a large extent by the public sector. There is also continuing activity in mining and resources but a broad based employment recovery has yet to emerge. The region appears to have settled into a lower employment equilibrium level of just over 100,000 jobs, which is down substantially from its peak of 117,000 in 2003. </div>
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Using Ontario ministry of finance numbers, a comparison of Northwestern Ontario’s employment distribution with Ontario’s in 2003 and 2010 (See Figures 1 & 2) shows the Northwest has become even more dependent on employment in retail and health and social assistance as the share of employment in manufacturing dropped from 13 to 6 percent. While total employment in Ontario has recovered from the recent recession and is about 6 percent above where it was in 2003, employment in the Northwest is still about 10 percent lower than 2003. Much work remains to be done.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHWqeKyIrWj3Qvhe3QMJDj-z9vvMl-9vQ4NstVIGOCeSDO4XiRRpLe9CRUVrRAhjNv4-97Zi_HlwZOA66F7Sb0NSVC0wgd3mW37Vh6TpP4kDGa6QgqFTv9WRK8ZKHssG9gSO_tAAkfJMbv/s1600/slide1-164.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHWqeKyIrWj3Qvhe3QMJDj-z9vvMl-9vQ4NstVIGOCeSDO4XiRRpLe9CRUVrRAhjNv4-97Zi_HlwZOA66F7Sb0NSVC0wgd3mW37Vh6TpP4kDGa6QgqFTv9WRK8ZKHssG9gSO_tAAkfJMbv/s640/slide1-164.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMZY8fZpqht2tAXAk5VheiFCZfNv8SeVig42iGK8ekXEq0i7QiJQ_1GbXEPr79hy6px99AG9GXpJfKceg-IVBPTlkB2AEMnO1fhVy9VYNHn00lJx8KbJX4MuVmzynCJ1GG73n_ha7_3pxv/s1600/slide1-165.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMZY8fZpqht2tAXAk5VheiFCZfNv8SeVig42iGK8ekXEq0i7QiJQ_1GbXEPr79hy6px99AG9GXpJfKceg-IVBPTlkB2AEMnO1fhVy9VYNHn00lJx8KbJX4MuVmzynCJ1GG73n_ha7_3pxv/s640/slide1-165.jpg" width="640" /></a></div>
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There are a number of things to watch for in 2012:</div>
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First, is Thunder Bay’s continued growth and evolution as a center for northwestern regional government. While formal regional government status and political autonomy has been continually dismissed as an option by the provincial government, it would appear that regional government is coming about by stealth. As a result of the Northern Growth Plan, there is now planning underway for a regional economic development zone pilot project. The regional economic development area’s organizational structure and functional authority bears a lot of resemblance to the Northwestern Ontario Regional Development Authority Plan from 2007 which morphed into the Common Voice initiative as it became apparent the provincial government was not interested in more regional autonomy– and quite frankly, neither was the north’s political leadership. One of the key initiatives of that plan – the Northwestern Ontario Policy Research Institute – survived into the Northern Growth Plan but since the announcement of its approval in Spring 2011 there has been silence. </div>
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Nevertheless, there is a growing web of regional and district services ranging from the District Social Services Administrative Board, the Regional Food Distribution Network and the Superior North Emergency Medical Service (EMS). These are currently operated with a patchwork of overlapping mandates centered on shared arrangements between the City of Thunder Bay and assorted provincial government ministries. As well, there is TbayTel which is providing telecommunications services on a regional level. As the number of these arrangements continue to grow, it is only a matter of time before there will be an attempt at consolidation into a more formal regional government apparatus.</div>
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Second, the Northwest will invariably need to keep an eye on the world economy and in particular, international commodity and resource prices. The volatility of the international situation means that the only reliable economic prediction will be that the economy will be uncertain. The forest sector in the region suffered additional setbacks in 2011 with the shutdown at the restarted mill in Terrace Bay as well as the shutdown at Global Sticks in Thunder Bay. While newsprint and pulp prices rose in the wake of the 2008 recession, they were relatively flat in 2010 and have been showing signs of weakening in 2011 despite the massive restructuring, which reduced capacity. As for oil prices, if they remain high, they will continue to generate activity out west for regional machinery and construction workers in the oil sands. As well, there is oil development in North Dakota, which may also be a source of opportunity for regional firms. Finally, metal and mineral prices will also be crucial. Copper and gold have been exhibiting a mixture of stability and strength and healthy mineral prices will be crucial to continued prospecting and development in the Northwest’s mining sector. Despite the new knowledge economy, rocks and trees will still be important to the regional economy in 2012. However, despite the promise of the Ring of Fire, nothing substantial will happen without the cooperation of the First Nations, competitive energy prices and new transportation infrastructure. </div>
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Third, the region will be affected by whatever steps the provincial government takes to reduce its deficit. Ontario faces a 16 billion dollar deficit, credit rating warnings and a debt of almost 250 billion dollars. The spring budget will use the advice of economist Don Drummond’s government spending review report to attempt a restructuring of government services that the Ontario government thinks will modernize delivery, save billions of dollars, and even improve public services. Dwight Duncan will eventually discover that only Harry Potter has magical powers and will be forced to revert to the fundamental deficit fighting tools of either cutting spending or raising revenues. Government spending cuts will be especially significant to Thunder Bay’s economy, which has been buoyed by public spending on infrastructure, education, health and research.</div>
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Evaluation</div>
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Northwestern Ontario enters 2012 with an employment situation that is vulnerable to international resource commodity price shocks and government deficit reduction exercises. In the face of these economic forces, leaders in the Northwest and particularly Thunder Bay will need to exercise their leadership skills with respect to regional advocacy, economic development and First Nation’s issues in a manner that accommodates the region’s growing political diversity. The Northwest is a large geographic expanse with a small and politically diverse population. </div>
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The western-most part of the region – from Dryden west to the Manitoba border is the closest to the booming west and its robust economic opportunities and examples. It also has the fastest growing population in the Northwest and this will likely be confirmed with the release of the population numbers in spring from the 2011 census. As a result, this part of the Northwest has been more prone to political experimentation sending a Conservative to Ottawa while remaining NDP at the provincial level.</div>
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The eastern part of Northwestern Ontario was hit the hardest by the forest sector crisis and in the absence of immediate new economic opportunities has embraced the politics of protest and gone NDP federally while still keeping an eye on government economic support by voting Liberal provincially. The provincial Liberal tide is strongest in the Nipigon-Thunder Bay-Atikokan Axis where Thunder Bay’s governing class sees itself not so much as a regional elite but as an extension of Toronto’s urban elite and its agenda of a green energy industrial strategy, knowledge sector research jobs and expanding government administration and regulation of social life and the economy. However, the successful implementation of this vision now rests on a minority provincial government.</div>
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As strange as it may sound, frequent and convenient air travel has resulted in Thunder Bay’s governing class developing views more in common with residents of downtown Toronto than Greenstone. Indeed, Thunder Bay is one of the islands of Liberal Red in the urban-rural split that characterized the results of the last Ontario election. When it comes to public sector spending cuts, it will be interesting to see how much the Toronto-centric Ontario government and bureaucracy values the affinity and devotion of Thunder Bay’s governing elite. It will also be interesting to see how long Thunder Bay’s governing elites can balance a vision of Thunder Bay as a regional center for the Northwest at home while portraying it as an extension of Toronto values at Queen’s Park.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/not_the_thunder_bay_waterfront_h/"><b>Not the Thunder Bay Waterfront Hotel You Were Looking For?</b></a></div>
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<li class="li8">Jan 2, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/waterfront+hotel/"><span class="s3">waterfront hotel</span></a></li>
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Well, it would appear that Thunder Bay does have a new waterfront hotel – the <a href="http://www.canadaentertainment.ca/thunderbay/hotels/delta/"><span class="s3">Delta Thunder Bay Ocean Pointe Resort</span></a>! According to a web entry, this definitely is the place to stay:</div>
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<i>This resort in the city features unobstructed views of the spectacular waterfront and city lights. Every June to September, enjoy a night at “Starlight Cinema”, with a three-course dinner on The Boardwalk patio as you watch a movie under the stars.</i></div>
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<i>Indulge your senses in an elegant Signature Club guest room, with choice amenities including cozy terry cloth bathrobes and feather-soft pillows and duvets. Unwind in the tranquil Signature Club Lounge with a nightcap from the honour bar, or keep connected with complimentary high-speed Internet access. Pamper yourself at the Spa at Delta Thunder Bay, enjoy a martini & live jazz in Rick’s Lounge or play a game of tennis on our year round lit Tennis Courts.</i></div>
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Sounds exciting? Well, there seems to be a caveat:</div>
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<i>This four-diamond resort & spa is ideally located in the heart of the city, on the waterfront of Thunder Bay 's charming Inner Harbor. Voted the “Best City in the Americas” by Condé Nast Traveler, 2003, Thunder Bay is situated on the southern tip of Vancouver Island, where the cherry blossoms and daffodils are in abundance.</i></div>
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t turns out, when you click to make reservations on this web site, it is the Delta Victoria Ocean Pointe. What does this mean? Well, it could mean that Thunder Bay is getting a Delta Hotel on its waterfront and there has been a mix-up. Or, it could mean that Delta Hotels has gotten Thunder Bay mixed up with Victoria and has built their waterfront hotel there. Oddly enough, if there is going to be a mix up, I would have expected Delta to inadvertently build the hotel in North Bay! Ah well, I am looking forward to the cherry blossoms and the daffodils.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/does_dwight_duncan_believe_in_ma/"><b>Does Dwight Duncan Believe in Magic?</b></a></div>
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<li class="li8">Jan 2, 2012<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/dwight+duncan/"><span class="s3">dwight duncan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy/"><span class="s3">policy</span></a></li>
</ul>
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Ontario is Canada’s largest province and befitting its status as the Queen of Confederation, now has the largest provincial debt and deficit in the country. In dealing with the provincial fiscal situation, much rests on the program spending review being conducted by economist Don Drummond. Due to be delivered by the end of January, it is expected to usher in an era of transformation of public services that will overhaul provincial government expenditures, restore the public finances, and perhaps even improve the quantity and quality of public services. The ability to transform government spending is Ontario finance minister Dwight Duncan’s great hope – a magic bullet that will reduce the need for destructive service cuts or incentive-destroying tax increases. </div>
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If one wants a glimpse of what the future may hold in terms of the Ontario government’s approach to deficit reduction, one need not wait for Don Drummond. Ontario’s government funded policy institute - the Mowat Centre - released a report titled “Fiscal sustainability and the Future of Government Spending: A Shifting Gears Progress Report” in November 2011. The report emphasizes transformative change – transformative tax initiatives such as the HST, transformative policy changes such as raising the retirement age, whole system reviews that harmonize functions across governments, embracing digitization, modernizing bureaucratic processes, new service delivery models, etc…There is a veritable buffet of international policy examples of how it is possible to reinvent delivery of government services and get more with less.</div>
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While restructuring and transformation of government service delivery is a viable long-term option, it operates best in small incremental steps. Moreover, without the stick of expenditure reduction or unpopular tax increases there is often little to motivate either entrenched bureaucracies or the public. Revolutions that seek broad economic restructuring of government in the end are doomed to failure because of entrenched interests as well as the high transactions costs of bringing about massive change. The reluctance to change is also based on the belief that once budgets are balanced and revenues recover, politicians will embark on new program initiatives that will make up for lost spending with new spending. In the case of Ontario, one only need look back to the Common Sense Revolution, which sought to restructure health care and government spending. Nearly two decades later, we are still talking about the need to transform public services in Ontario. And in the case of health, we cannot forget the Romanow Report and the prescription to buy “transformative change” – a decade later the provinces still clamor for more money and health is still considered unsustainable.</div>
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The one swoop magical approach to transforming government spending in a manner that balances the budget and maintains services is an appeal to fiscal magic on the part of those who flee from fiscal fundamentalism. In the end, the way to fight a deficit is to either raise revenues or reduce expenditures or a combination of the two. Either of these approaches may provide incentives to government bureaucracies to innovate on service delivery and engage in “transformation” but to expect that they will do so without the fiscal motivation of expenditure reduction is unrealistic. It is also unrealistic to allow the public to expect that service levels will somehow remain unaffected. </div>
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In the case of Ontario, this talk of government transformation is either expenditure reduction in disguise induced by the political fragility of a minority government situation or it reflects the government’s true views on how to manage the deficit. If it is the latter, it is akin to a belief in fiscal magic. If only there actually was a magical solution given the size of Ontario’s deficit and its decade long economic decline. Realistic or not, Dwight Duncan seems to believe in magic but whether he is able to cast a spell on the public will be another matter.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-34422122976960328072016-12-14T16:01:00.001-08:002017-05-28T05:52:18.048-07:00December 2011 Posts<div class="p1">
<b>16 Posts from December 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/season_s_greetings_from_northe_1/"><b>Season's Greetings from Northern Economist</b></a></div>
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<li class="li3">Dec 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/christmas/"><span class="s2">christmas</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economics/"><span class="s2">economics</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/greetings/"><span class="s2">greetings</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/humour/"><span class="s2">humour</span></a></li>
</ul>
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Christmas and the New Year are once again upon us. It is time for Northern Economist to once again demonstrate that economics is not really the dismal science but indeed is one of the helping professions by helping you celebrate Christmas with Economics! One of my favorite Christmas economics web experiences is the <a href="http://www.youtube.com/watch?v=kMNS9BwtcxM"><span class="s2">London School of Economics Choir performing Handel’s Hallelujah Chorus</span></a>. We all know they do great economics at the LSE but they can sing too. </div>
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For those of you who are worried about inflation and need to know the latest CPI numbers, why not take a look at the other CPI – the Christmas Price Index. <a href="http://content.pncmc.com/live/pnc/microsite/CPI/2011/index.html"><span class="s2">PNC Wealth Management</span></a> has been pricing the cost of the gifts in the song the 12 days of Christmas for the last 28 years. Visit their site for the 2011 edition. For example, the price of a partridge in a pear tree was $32.52 in 1984 – today, $184.99. The price of talent has also gone up. In 1984, twelve drummers drumming were $834.47 but are now $2,629.90. </div>
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If you are practically minded and want to increase the economic value of your Christmas present transactions, visit <a href="http://andreasmoser.wordpress.com/2010/12/23/economics-of-christmas/"><span class="s2">Publish or Perish-Andreas Moser’s Blog</span></a> for advice like:</div>
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“The best approach would be not to give any presents at all. In a free economy, people will buy what they need and want, and suppliers will produce and sell what people want. This radical approach might seem a bit heartless though…” As a result, Andreas also suggests giving money – the gift that’s always appreciated – or simply provide a wish list. For the record, Andreas likes cigars and books. If you are interested, I like wine and books. Myself, I ultimately think it’s the thought that counts and if you think hard enough you can come up with something appropriate for everyone. For example, I often think the best Christmas gifts for fresh-water macro-economist friends are Candy Keynes. </div>
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Always remember, economic analysis is the gift that keeps on giving. All the best for a Merry Christmas and a Happy New Year from Northern Economist. Northern Economist will be taking a holiday break until January. See you in 2012.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_s_list_of_thi/"><b>Northern Economist's List of Things to Watch for in 2012</b></a></div>
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<li class="li3">Dec 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2012/"><span class="s2">2012</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/humour/"><span class="s2">humour</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/trends/"><span class="s2">trends</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/world/"><span class="s2">world</span></a></li>
</ul>
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What will the New Year bring? Northern Economist is looking ahead for the exciting trends and developments that 2012 will bring the world economy – internationally, nationally and of course right here in the Most Serene Kingdom of Thunder Bay.</div>
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<li class="li7">In a fund-raising effort worthy of We Are the World, Silvio Berlusconi and William Shatner will team up and record an album to raise money for European debt relief. The lead song on the album will be Lucia in the Sky with Diamonds. They will conclude with a video duet of the famous "Au fond du temple saint" from Bizet’s The Pearl Fishers in which they both lament lost love real or imagined against a visual backdrop featuring German Chancellor Angela Merkel and the Starship Enterprise.</li>
<li class="li7">As part of the 2012 Diamond Jubilee celebrations for Queen Elizabeth the Second, a giant wire will be strung across the two “iconic” Beacons on Thunder Bay’s waterfront park and decorated with red, white and blue bunting and giant Union Jacks. Once the Jubilee Celebration is over, the Beacons will be converted into an exciting new tourist attraction. Giant oversize clothes will be strung from the wire and in honor of the prominent natural Thunder Bay harbor landmark, the beacon exhibit will be rechristened The Sleeping Giant’s Clothesline.</li>
<li class="li7">As part of its Green Energy Strategy designed to save the environment and create jobs and prosperity, the Ontario government will announce that it is embracing new airship technology and build a fleet of airships to provide transportation infrastructure to the Ring of Fire and Ontario’s far north. However, it will be decided that the base for construction and deployment of the new technology will be at Queen’s Park in Toronto. Despite the uproar in northern towns starved for jobs, this will not be the result of indifference to the north or a desire to generate employment in Toronto. A consultant’s study will conclude that the Queen’s Park location is best suited to the production of high performance Lighter than Air Technology hot air inflation equipment.</li>
<li class="li7">In a daring move, Canada’s First Nations will announce that under their inherent rights and obligations as sovereign nations, the Canadian Federal Government will be placed under third party management and will send in former Auditor-General Sheila Fraser and Parliamentary Budget Officer Kevin Page as Administrators Plenipotentiary and Extraordinary with a joint mission to audit the Federal Government’s structural deficit forecast.</li>
<li class="li7">The European Union will create a new joint stock company – Acme International Finance Corporation and collect all of its member’s sovereign debt obligations and sell them to this new agency at a discount, which will then use them as collateral to issue bonds that will be known as Your Owes. The Acme International Finance Corporation will then be jointly purchased by the Canadian Pension Plan and the Ontario Teacher’s Pension Plan Fund and the equity value donated to create a massive public endowment to generate income that will help finance and sustain the Canadian public health care system.</li>
<li class="li7">The Oxford English Dictionary will add a new definition of the word “imminent” to its definitive compilation based on its use in Thunder Bay to describe the eventual announcement of a waterfront hotel. The entry will read:</li>
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im·mi·nent [im-uh-nunt]</div>
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adjective</div>
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1. likely to occur at any time: eg. After a festering illness, death was imminent.</div>
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2. overhanging: eg. The unstable mass of rock means that danger is imminent.</div>
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3. possibly occurring in a time frame that is immediate, or perhaps within a longer time frame ranging from several days to one or more years depending on inter temporal perceptions of the fullness of time and space. Eg. The announcement of the hotel proprietor on Thunder Bay’s waterfront is still imminent.</div>
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It is going to be an exciting New Year for us all!</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_s_threat_from_the_no/"><b>Thunder Bay's Threat from the North</b></a></div>
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<li class="li8"><span class="s3">Dec 15, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/centreport/"><span class="s2">centreport</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/churchill/"><span class="s2">churchill</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba+gateway/"><span class="s2">manitoba gateway</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/port+of+thunder+bay/"><span class="s2">port of thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ring+of+fire/"><span class="s2">ring of fire</span></a></span></li>
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The new report by the Conference Board of Canada titled Northern Assets: Transportation Infrastructure in Remote Communities on transportation in northern Canada provides a case study of Churchill Manitoba as a potential international gateway that may give the Port of Thunder Bay some cause for concern. The Port of Churchill and its Bay Line rail line play a key role in what is referred to as the Government of Manitoba’s Churchill Gateway System. Churchill could increase its role as a shipping hub by diversifying the range of agricultural products it handles and by increasing its share of Nunavut-bound freight—especially for mining projects. As well, climate change and melting sea ice is opening up the possibility of developing polar shipping lanes between Churchill, Asia, and Europe.</div>
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Churchill’s main competitor for Asian and European markets is the Canadian east-west rail-marine transport network and in particular, the Port of Thunder Bay. Table 4 of the Conference Board report shows how Churchill is closer to many European ports than Thunder Bay. The year-round shipping opportunities afforded by global warming apparently makes Churchill an even more attractive shipping venue.</div>
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Developing Churchill’s role as a shipping hub in Northern Canada will require substantial investment in transportation infrastructure in and around the community, consolidated effort from public and private stakeholders, and an informed analysis of such a transportation network. A key proponent is the province of Manitoba which has a transport strategy known as Centreport with Winnipeg as a key hub. According to the Conference Board Report:</div>
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<i>The overarching aim of the strategy is to “advance Manitoba’s position as a sustainable transportation and distribution gateway of choice for North American mid- continent global commerce and international travel.” The development and growth of the Port of Churchill is a key element of this strategy.</i></div>
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While initial versions of the Centreport Strategy placed Thunder Bay on the eastern arm of the transport network, recent reformulations appear designed to bypass the Port of Thunder Bay entirely. As the accompanying map from the Conference Board report shows, the planned Manitoba International Gateway Strategy now bypasses Thunder Bay completely with the eastern arm being a land route going through Minneapolis and Chicago and then through southern Ontario. The Canadian ports in this strategy are saltwater ports – Prince Rupert, Vancouver, Churchill with the St. Lawrence-Seaway Ports being Detroit-Windsor, Toronto, and Montreal. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhc7J5pLrpUKPUVBveVWORm7o0s6n-OxDrev8SbXkllKaDpjy_rZOf-S0hGVnWGGWgV15l_SLDIjl4ZPeH-_9vwRy8l2pgGNpheuR8IE2STj8ZSNpI6hDR6HC6sPqs6jA16CTbkx7hio-Yi/s1600/slide1-163.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhc7J5pLrpUKPUVBveVWORm7o0s6n-OxDrev8SbXkllKaDpjy_rZOf-S0hGVnWGGWgV15l_SLDIjl4ZPeH-_9vwRy8l2pgGNpheuR8IE2STj8ZSNpI6hDR6HC6sPqs6jA16CTbkx7hio-Yi/s640/slide1-163.jpg" width="640" /></a></div>
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However, developing this new North American transportation pattern with Churchill as a northern shipping hub will require substantial new investment in transportation infrastructure. Yet, there is substantial transport infrastructure already in place along the Great-Lakes St. Lawrence Seaway with Thunder Bay’s port already in place with substantial capacity. Why should the Canadian taxpayer be building new transport infrastructure when there is a cost-effective east-west infrastructure already in place that can be incorporated into the Manitoba Centreport and Gateway Strategies? Alarm bells should be ringing in Thunder Bay given that this new strategy is not just a Manitoba government lobbying strategy but now also seems to have been given the blessing of the Conference Board of Canada. What's next? A call for Federal government funding to build a rail link from Churchill to the Ring of Fire?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/transport_infrastructure_and_ont/"><b>Transport Infrastructure and Ontario's North: Floating New Ideas</b></a></div>
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<li class="li8"><span class="s3">Dec 15, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/airships.+technology/"><span class="s2">airships. technology</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/climate+change/"><span class="s2">climate change</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/infrastructure/"><span class="s2">infrastructure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+canada/"><span class="s2">northern canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transportation/"><span class="s2">transportation</span></a></span></li>
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One of the persistent themes in Northern Ontario economic history is transportation and access. From the days of the fur trade, to the arrival of the railroad and later on the onset of modern highways and air travel, transportation has been essential to accessing natural resources and getting them out to market. Yet, Northern Ontario’s transport network has borne the marks of being tailored to economic resource exploitation rather than linking together people. The network has been designed to move resources and goods out of the region rather than facilitate travel and communication within the region. This has been a factor in the regional divisions within a vast and sparsely populated region.</div>
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A new report by the Conference Board of Canada titled Northern Assets: Transportation Infrastructure in Remote Communities highlights the challenges of northern Canadian transportation in general and particularly the new changes being wrought by climate change such as permafrost degradation. While the report focuses on a case study of Churchill, Manitoba, many of the issues also apply to remote rural resource communities in Northern Ontario particularly with respect to the dawn of resource exploitation in the Ring of Fire.</div>
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According the report, transportation infrastructure is more expensive to build and maintain in Canada’s North and climate change is disrupting existing rail and winter-road links. This transportation infrastructure is not only vital to northern communities but also benefits all Canadians through its contribution to national security and sovereignty. With milder winters, the viability of winter roads is becoming particularly acute as a problem to remote rural first nations given the reliance on them for resource development projects and supplies.</div>
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The report argues that the costs and benefits of transport infrastructure in Canada’s north must be measured by different standards than the more densely populated south. In particular, the design, construction and operation of new transportation infrastructure must include measures to mitigate and adapt to the potential effects of climate change and this will require better communication and partnership between public and private sector partners. </div>
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If rural remote First Nations in northern Ontario are to fully realize the benefits of resource development on their lands, they will require dependable transportation infrastructure. Most interestingly, the report also discusses the potential contribution of non-conventional transportation modes such as airships in providing future transportation infrastructure. This aspect of transportation innovation is mentioned as “an intriguing possibility” in the report. </div>
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As the report writes:</div>
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<i>Today, airships are commonly thought of as an old, obsolete technology. However, that perception may change after the launch of Northrop Grumman’s long- endurance multi-intelligence vehicle (LEMV). Three of these vehicles will be supplied to the U.S. Army primarily for surveillance purposes. The first is on track to be delivered by the end of 2011. These hybrid airships, which combine lighter-than-air technologies (buoyant gases) and heavier-than-air technologies (fixed-wing aircraft), are designed to carry a payload of over one tonne at nearly 10,000 metres, while staying continuously airborne for over three weeks. At this capacity, their use for Northern resupply would be negligible. However, trade-offs can be made between range, altitude, and capacity. Cargo applications would not require the same type of endurance and would not need to fly at those high altitudes. Barry Prentice, a professor of supply chain management at the University of Manitoba, argues there are no technological barriers to building freight airships able to carry a payload of 20 tonnes or higher. This payload is in the same range as a single tractor-trailer truck, but an airship would be faster, more fuel efficient, and able to land virtually anywhere, removing the need for expensive road construction and maintenance. In fact, airships may be operating in the North as early as 2014. Discovery Air Innovations Inc., a subsidiary of a Yellowknife aviation company, has signed a tentative agreement with Hybrid Air Vehicles Ltd. (HAV) to procure a fleet of airships to be used in the North. HAV is the same company manufacturing the LEMVs for Northrop Grumman…There is significant potential for the widespread commercial application of airships, particularly for resource extraction industries. And, given that federal, provincial, and territorial governments are committed to supporting Northern resupply activities, there may be opportunities for public-private partnerships to help finance infrastructure capital and maintenance costs.</i></div>
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As a new and innovative transportation technology in Ontario’s North, airships could be useful for both passenger and cargo transportation on a year round basis and save public sector capital expenditure on permanent road and rail links. Remote communities could have frequent and cost-effective transportation for their people and goods to urban centers that would provide the necessary market links that could generate economic viability for communities.</div>
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Manitoba seems to be taking a lead in pioneering this new technology. Today, the Isopolar Airships Inc. Company will be announcing the completion of an 80 foot single pilot airship - the MB80 - in the Engineering Building on the campus of the University of Manitoba. The ship will be used to perform airship research under Canadian weather conditions as the next step to adapting airship technology to Canada's north. In northern transportation, the sky is the next frontier.</div>
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<div class="statcounter"><a title="tumblr site counter" href="http://statcounter.com/tumblr/" target="_blank"><img class="statcounter" src="http://c.statcounter.com/6528705/0/aa6c5f8c/1/" alt="tumblr site counter"></a></div></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/university_faculty__the_rise_of_/"><b>University Faculty: The Rise of the Administrative Class and Student-Faculty Ratios</b></a></div>
<ul class="ul1">
<li class="li3">Dec 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/administration/"><span class="s2">administration</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/enrollment/"><span class="s2">enrollment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/faculty/"><span class="s2">faculty</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/universities/"><span class="s2">universities</span></a></li>
</ul>
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With rising enrollments at university campuses across the country, it is instructive to examine what the trends have been in faculty numbers. Statistics Canada provides annual data on the number of full-time teaching staff at Canadian universities for the period 1970 to 2008 and the long-term trends are interesting. Data is available for full-time faculty with senior administrative responsibilities and those without senior administrative duties. </div>
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Over the period 1970 to 2008, the total number of full-time faculty at Canadian universities grew from 24,597 to 41,954 – an increase of 71 percent. There appear to be three phases to the growth in faculty numbers - a period of increase from 1970 to 1993 when total numbers grew by 50 percent. A period of decline from 1993 to 1998 when numbers declined by 9 percent followed by a period of recovery from 1998 to 2008 when the total numbers of full-time faculty rose by 25 percent. Interestingly enough, while faculty numbers have increased in recent years, enrollment has increased faster. Over the period 1992 to 2008, total enrollment at Canadian universities grew by 26 percent while the number of total full-time faculty grew by 13 percent. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6FQMia6sctmRRXj7SfYmYq735ebCFTrpXEmp0fETDMaV89hnkpVarLwhabsmJSpyLeaQhncCNTHi-czX6lYInjyxwEyX9wWUqKPoVhLFhDd4Hy4fqLSMsavIKNGrkPJzoYx2dv3Q2Oxgf/s1600/slide1-162.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6FQMia6sctmRRXj7SfYmYq735ebCFTrpXEmp0fETDMaV89hnkpVarLwhabsmJSpyLeaQhncCNTHi-czX6lYInjyxwEyX9wWUqKPoVhLFhDd4Hy4fqLSMsavIKNGrkPJzoYx2dv3Q2Oxgf/s640/slide1-162.jpg" width="640" /></a></div>
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The stretching of faculty human resources across more students is also accompanied by another factor- an increasing proportion of full-time faculty holding senior administrative appointments. Between 1970 and 2008, the number of full-time faculty without senior administrative appointments grew by 63 percent while those with senior appointments grew 196 percent. Whereas in 1970, the percent of full-time faculty with a senior administrative appointment was 6 percent, it is now over 10 percent though the proportion has declined since 2000 as the last few years actually saw faculty numbers without full-time senior administrative duties grow faster than those with. </div>
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The modern university does appear to have become a more administratively intensive organization and the number of faculty involved in administrative activities appear to have grown faster than those in traditional line functions. However, much of this growth appears to have occurred before the mid-1990s. During the 1990s, the percentage decline in faculty was similar across both categories whereas since the end of the 1990s, faculty renewal has actually seen the numbers of faculty without senior administration appoints grow faster than those without. However, one can probably expect to see a slowdown in faculty growth rates in the near future given fiscal situations in a number of provinces though enrollment is expected to continue rising. This means the number of students per full-time faculty member will continue to rise. Even with the robust additional hiring since 1998, the number of students per full-time faculty member from 1992 to 2008 grew from 23.8 to 26.5 - an increase of 11 percent.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_changing_face_of_public_sect/"><b>The Changing Face of Public Sector Employment: The Municipal Ascension</b></a></div>
<ul class="ul1">
<li class="li8"><span class="s3">Dec 11, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/distribution/"><span class="s2">distribution</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+growth/"><span class="s2">municipal growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+sector+employment/"><span class="s2">public sector employment</span></a></span></li>
</ul>
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Over the last decade, the number of public sector employees has grown. Between September 2001 and September 2011, the total number of public sector employees has grown from 2.795 to 3.310 million – an increase of 18.4 percent. What is interesting is the changing distribution of those employees over the last decade (See Figure 1). In 2001, 12 percent of public sector workers were employed in the Federal Government, 12 percent were employed with Provincial-Territorial Governments, 11 percent were employed in the Post-Secondary Education sector, 26 percent were in Health and Social Services, 17 percent were in Local Government and 22 percent were employed in Local School Boards. By 2011, the federal share had grown to 13 percent, post secondary education was up to 12 percent and local government was up to 18 percent. The share of health and social services had stayed the same while that employed by local school boards had declined to 20 percent.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguD0FDfthCSZG4teYZKlGv6QKjQ07ZZOFU_Ek2V9R-LeiHwkdrABBLicmXMgNSHSjs_eFOrZzXGx5v5MGBEKgKRoiUe-gsWsi2Asmbd2KqK86U1DAL7RuHCUJETJghHjfYzzpq0EqzyDVn/s1600/slide1-159.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguD0FDfthCSZG4teYZKlGv6QKjQ07ZZOFU_Ek2V9R-LeiHwkdrABBLicmXMgNSHSjs_eFOrZzXGx5v5MGBEKgKRoiUe-gsWsi2Asmbd2KqK86U1DAL7RuHCUJETJghHjfYzzpq0EqzyDVn/s640/slide1-159.jpg" width="640" /></a></div>
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The fastest growing part of public sector employment in Canada over the last decade was the local government sector, which saw its employment rise from 467,186 to 604,937 – an increase of 29.5 percent (See Figure 2). Close behind, was the post-secondary education sector which saw employment its employment grow from 295,915 to 382,341 – an increase of 29.2 percent though it remains one of the smallest sectors. Health and social services grew by only 20.6 percent but at 862,981 employees remains the largest share of public sector employment. The Federal government came in fourth place with growth of 19.8 percent. Local school boards grew by only 8.9 percent while provincial-territorial government employment grew by 5.1 percent.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2EPN4eou5tZZomsdZvl6ARSqDMYKfw7ZUtJh9O2fukIeME4AQw6q6BH-MLCqQc-St5KWfqY_85XJQ1nV0QI03FJ3WztbuKZdhHG5lCb9WLlWHarHsrBJY-xmwa3ZCufd6BYZ73G1ST5Nh/s1600/slide1-160.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2EPN4eou5tZZomsdZvl6ARSqDMYKfw7ZUtJh9O2fukIeME4AQw6q6BH-MLCqQc-St5KWfqY_85XJQ1nV0QI03FJ3WztbuKZdhHG5lCb9WLlWHarHsrBJY-xmwa3ZCufd6BYZ73G1ST5Nh/s640/slide1-160.jpg" width="640" /></a></div>
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Of course, health, social services, post-secondary education, local school boards and local government are all under the jurisdiction of provincial governments yet all of this employment combined only grew by 18.2 percent – quite close to the rate of growth of total public sector employment as well as federal employment. It would appear that while there has not been an employment shift away from federal employment towards the broader provincial-local sector, within the provincial local sector there has been a large shift towards municipal government and post-secondary education. As Figure 3 tries to illustrate, there is a rising trend in the share of local government public sector employment and that for post-secondary education. The increase in municipal sector employment is the more important trend given its already large employment share. The increase in municipal employment is particularly interesting as it suggests a shift towards decentralization within provinces and an increase in the importance of the municipal role. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXkrYHfD-ObLXQbU5hWystyKIKcAkTl62GaetC04gqiQeBFxDxz4wBJ_VCnD4Yrp5OL_9SmnB11gx48pwItP2DKSGoDRtJcxs_BO2QpRe4a5_husNMGcnNBnSVo7zgKSYU8Xb552lC9d-v/s1600/slide1-161.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXkrYHfD-ObLXQbU5hWystyKIKcAkTl62GaetC04gqiQeBFxDxz4wBJ_VCnD4Yrp5OL_9SmnB11gx48pwItP2DKSGoDRtJcxs_BO2QpRe4a5_husNMGcnNBnSVo7zgKSYU8Xb552lC9d-v/s640/slide1-161.jpg" width="640" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_gasoline_prices_amon/">Thunder Bay Gasoline Prices Among Highest in the Country</a></b></div>
<ul class="ul1">
<li class="li3">Dec 10, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/gasoline+prices/"><span class="s2">gasoline prices</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ranking/"><span class="s2">ranking</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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What does Thunder Bay have in common with Yellowknife, Vancouver and Montreal? Is it:</div>
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a) a cosmopolitan urban street life</div>
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b) snowy winters</div>
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c) traffic congestion</div>
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d) some of the highest gasoline prices in the country</div>
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If you answered d), you are correct. While Canadian motorists have been complaining about high gasoline prices for some time now, when one looks at Statistics Canada gasoline price data for major urban centers in the country, drivers in Thunder Bay are paying some of the highest prices in the country along with drivers in Montreal, Vancouver and Yellowknife. For the period January to September 2011, the average monthly price for regular unleaded gasoline at full service stations ranged from a high of $1.37 a litre in Yellowknife to a low of $1.11 in Edmonton with Thunder Bay coming in fourth at $1.33.(See Figure 1) For unleaded gasoline at self-service stations, the average prices ranged from a high of $1.33 in Vancouver to a low of $1.09 in Edmonton with Thunder Bay coming in third at $1.31.(See Figure 2). </div>
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<b>FIGURE 1</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi26DgsHAGpdYFjw5px8GcAg8V6MsjeB3adCF4l8zfzvw5W3_UpKuIwAnOrqhL_CVsYVhzbj3qXFfUyso2W4RlPi9EA5DQkXGMDF7zM00yBGra47qDcofGODZTRlnpWAivmcLv3drp6l7IX/s1600/slide1-156.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi26DgsHAGpdYFjw5px8GcAg8V6MsjeB3adCF4l8zfzvw5W3_UpKuIwAnOrqhL_CVsYVhzbj3qXFfUyso2W4RlPi9EA5DQkXGMDF7zM00yBGra47qDcofGODZTRlnpWAivmcLv3drp6l7IX/s640/slide1-156.jpg" width="640" /></a></div>
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<b>FIGURE 2</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgW59a89BcdJTj9zevmqYX6yBziKD8l4YcFiMgnmBaDPIT8Kght5cgRzAyL2tUHrUCyJIVxP7_tMgEKLPMFM7SlJfLkLNK8S4CcWJh0K5taORGSHaSjIcDY6gvb7380KOd5vwSQZyb2AAAK/s1600/slide1-157.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgW59a89BcdJTj9zevmqYX6yBziKD8l4YcFiMgnmBaDPIT8Kght5cgRzAyL2tUHrUCyJIVxP7_tMgEKLPMFM7SlJfLkLNK8S4CcWJh0K5taORGSHaSjIcDY6gvb7380KOd5vwSQZyb2AAAK/s640/slide1-157.jpg" width="640" /></a></div>
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Thunder Bay's prices have been among the highest in the country for some time now. Like the rest of the country, they have been trending up dramatically since the latter part of the 1990s given the increase in the world price of oil. As Figure 3 shows, the spike in retail gasoline prices in Thunder Bay since 1999 - as in the rest of the country - matches the spike in the price of crude oil. On the one hand, we are not alone given that motorists in Vancouver and Montreal seem to be sharing a similar fate. On the other hand, our average monthly gasoline prices are easily 15 cents a litre more than Winnipeg which is not that far away. It is difficult to believe that such a difference is based on solely on transportation cost and distribution factors. </div>
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I would like to see a study on the number of gasoline stations per capita in Canada's major urban markets as well as the number of gasoline retail companies to see if urban markets with fewer stations per capita and fewer companies have higher prices. The number of companies in a market as well as the number of stations might be a good indicator of how competitive a market might be. That would provide the necessary evidence as to whether high prices in places like Vancouver, Montreal and Thunder Bay are a result of them being less competitive markets.</div>
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<b>FIGURE 3</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipe5xdzvfdls3Bn04vOYxdOmxlSMt84bKOPEMXwUqQuHQt3PWycIdVxuPQUeB5usmNY-owycL1LgqLROeD_SrLMBwjGr3bZuEXJTYbGi55lSv7BIBu99sDqYhpEUIDJvAtvirbbMjyv1_G/s1600/slide1-158.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipe5xdzvfdls3Bn04vOYxdOmxlSMt84bKOPEMXwUqQuHQt3PWycIdVxuPQUeB5usmNY-owycL1LgqLROeD_SrLMBwjGr3bZuEXJTYbGi55lSv7BIBu99sDqYhpEUIDJvAtvirbbMjyv1_G/s640/slide1-158.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/government_employment_share_on_t/"><b>Government Employment Share on the Way Down</b></a></div>
<ul class="ul1">
<li class="li3">Dec 9, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+sector/"><span class="s2">public sector</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recession/"><span class="s2">recession</span></a></li>
</ul>
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There are many indicators of economic recovery such as falling unemployment rates, rising GDP growth or rising retail sales. However, another sign of economic recovery is when something else is falling - the share of employment accounted for by government workers. I've plotted below a graph of monthly government employment in Canada over the period 2001 to 2011 as a percent share of total employment. Government employment data was obtained from Statistics Canada and is defined in this graph as federal government, provincial territorial government, health and social service, local government and local school board employment. I have not included employment by government business enterprises. </div>
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The accompany Figure 1 shows that from 2001 to 2008, government employment was a relatively stable share of total employment. It was with the onset of the global financial crisis and the recession that it rose as a share of total employment and rather dramatically at that. While private sector employment dropped dramatically because of the recession's impact, government stimulus and deficits served to continue to expand government employment so that the share of total employment in government rose. As the economy began to recover, private sector employment began to rise again while government employment growth continued to rise until 2011. By the end of 2010, non-government employment had still not returned to its pre-recession levels, while government employment was above its pre-recession levels. (See Figure 2) The decline in the government share of employment over the course of 2011 can be interpreted as a sign that the economy is recovering and that private sector job creation has resumed. Indeed, government employment in 2011 actually has begun to decline while non-government or private sector employment has continued to rise and in 2011 finally surpassed its pre-recession peak. This suggests that public sector employment indeed played its role as an economic stabilizer during the downturn. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1vc7asbCRu-2oD0lA1ckCoZ7UKI7DzUgvYFN8h_TIBwWY0Juq5fsXvQ_krhWmJEqR8YVH6vQe9Zx_uUry2Urjz3PF3IxtGdRAGGRpvtkisEY8LOTGPLviHeXiiIm3YLVkfm61lUuIxaoQ/s1600/preview_slide1-150.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1vc7asbCRu-2oD0lA1ckCoZ7UKI7DzUgvYFN8h_TIBwWY0Juq5fsXvQ_krhWmJEqR8YVH6vQe9Zx_uUry2Urjz3PF3IxtGdRAGGRpvtkisEY8LOTGPLviHeXiiIm3YLVkfm61lUuIxaoQ/s640/preview_slide1-150.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglNxKlZs4k2vHLE9lJa9qjLDmVx0J9xseS0-Cc8d2UVh7SHCNJK1XYepMUJk_2RxTrqDM8HiE6NjtjdZF_XKZx9JaXCZ8rGKCVK7el12DSn4B1sRnMbQO3TraQxlVDphnkun9oEAsYB8mc/s1600/slide1-152.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglNxKlZs4k2vHLE9lJa9qjLDmVx0J9xseS0-Cc8d2UVh7SHCNJK1XYepMUJk_2RxTrqDM8HiE6NjtjdZF_XKZx9JaXCZ8rGKCVK7el12DSn4B1sRnMbQO3TraQxlVDphnkun9oEAsYB8mc/s640/slide1-152.jpg" width="640" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_on_ipolitics_/">Northern Economist on iPolitics and Evidence Network!</a></b></div>
<ul class="ul1">
<li class="li3">Dec 8, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/costs/"><span class="s2">costs</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/evidence+network/"><span class="s2">evidence network</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+expenditure/"><span class="s2">health expenditure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/physicians/"><span class="s2">physicians</span></a></li>
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<b>Physician fee increases driving up <br />
cost of health care: report</b></div>
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by Livio Di Matteo</div>
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Published on <a href="http://www.ipolitics.ca/2011/12/08/physician-fee-increases-driving-up-cost-of-health-care-report/"><span class="s2">iPolitics.ca</span></a> on December 8th, 2011.</div>
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<b>How this happened, and what we can do about it</b></div>
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The recent release of National Health Expenditure Trends by the Canadian Institute for Health Information (CIHI) puts total health expenditure in Canada at a whopping $192.9 billion in 2010 and $200.5 billion in 2011 — annual increases of 5.9 and four per cent respectively. This year’s release was also accompanied by a report titled Health Care Cost Drivers, which finds the period from 1998 to 2008 was one in which public health care spending grew at an average of 7.4 per cent annually — double the rate of government revenue.</div>
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Physician spending was highlighted as one of the fastest-growing public-sector health categories of recent years, with half of the growth attributable to increases in physician fee schedules.</div>
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Economists are not surprised that physicians were able to negotiate generous fee increases given the general perception of physician shortages. However, it should be noted that the period since 2003 has seen a marked increase in the number of physicians after a period of relative stability, due largely to sharply higher medical-school enrollment.</div>
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The average number of physicians per 10,000 people in Canada is now rising markedly in most provinces after the small decline of the 1990s.</div>
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Governments are often conflicted when it comes to public health care. While more physicians means more services and access for the public, it also means more public spending. With health care sustainability once again moving into the forefront of policy discussion in Canada, physicians and their role as health-system gatekeepers will be coming under scrutiny.</div>
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If we are going to spend more on physician services, we need to ensure that we can measure outcomes and assess whether we are getting better care.</div>
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Indeed the cost and effectiveness of many procedures will likely be an area of examination. As well, we can expect to see even more pressure to move away from fee for service models of physician reimbursement and towards models that pay physicians set salaries or fixed payments per enrolled patient — though there is no certainty that these will help control costs.</div>
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There is surprisingly little evidence on whether or not alternate payment systems for physicians generate large differences in health care costs and health outcomes.</div>
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One of the arguments used to restrict medical-school admissions in Canada in the early 1990s was that physicians were a primary cost driver in the health system because of their role as gatekeepers. Reduce the number of physicians and replace them with nurse-practitioner teams and it was felt cost savings would automatically ensue.</div>
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However, the 1990s saw a perception of widespread physician shortages though only a handful of provinces had declines in the per capita number of physicians (Ontario, BC, Alberta, PEI and Nova Scotia), and by 2010 these declines have turned into marked increases in most of these provinces.</div>
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Moreover, after a short pause, health-care spending still continued to mount, driven also by drugs, diagnostic technology and public-health initiatives. The recent increase in physician numbers more than makes up for the small decline of the 1990s but is being accompanied by expenditure increases.</div>
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While physician spending is an important cost driver, the drivers of public health-care spending are also a complex interaction between physician decision-making, new diagnostic and drug technologies, population growth and aging, and the cost and deployment of other health human resources used in treatment.</div>
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Indeed, a positive correlation between physician numbers and health spending is not automatic. In other words, a high per capita number of physicians is not always associated with high per capita health spending. Quebec, for example spends the lowest amount per capita on public health care spending and yet has one of the highest number of physicians per capita. Manitoba, on the other hand has the second highest per capita public health spending in the country but is one of the lowest in terms of physicians per capita.</div>
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Two lessons emerge from this. First, public health-care spending is complex and care needs to be taken that cost-control approaches to health-system sustainability use a balanced approach rather than setting simplistic goals that target only one aspect of the health care system. Although physicians are a health cost-driver, they are not alone but operate as part of a system that also drives costs.</div>
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Second, the federal government needs to coordinate information sharing and exchange amongst the provinces so that they can learn from each other on a best practice basis how to balance any increases in physician numbers and access to services with measures to keep health spending costs under control.</div>
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<span class="s4"><b>Livio Di Matteo</b></span> is a professor of economics at Lakehead University and an expert advisor to <a href="http://umanitoba.ca/outreach/evidencenetwork/"><span class="s2">EvidenceNetwork</span></a>.ca, a comprehensive and non-partisan online resource designed to help journalists covering health policy issues in Canada. He holds a PhD from McMaster University, an MA from the University of Western Ontario and an Honours BA from Lakehead University.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/aboriginal_population_projection/"><b>Aboriginal Population Projections</b></a></div>
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<li class="li3">Dec 7, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/aboriginal+population/"><span class="s2">aboriginal population</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a></li>
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<span class="s2"><a href="http://www.statcan.gc.ca/daily-quotidien/111207/dq111207a-eng.htm">Statistics Canada has released a study</a></span> projecting that by 2031, Canada’s aboriginal identity population will range from 1.7 million to 2.2 million representing anywhere from 4 to 5.3 percent of Canada’s total population. These are of course based on the 2006 Census, which means they will be out of date quite soon. I would suspect that revised projections using the 2011 results would probably show even larger populations for aboriginal identity Canadians by 2031. This is because population projections for northern Ontario done based on the 2001 census that showed declining populations in the north to 2031 once revised using the 2006 census – which picked up the higher aboriginal birth rates – now show a stable northern Ontario population until 2031. I suspect that after 2011, projections for Canada will also show even more of an increasing aboriginal population.</div>
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According to Statistics Canada, five projection scenarios were selected for analyzing the results. They were: "Scenario 1, “No ethnic mobility and constant fertility,” combines the constant fertility assumption, the nil intra-generational ethnic mobility assumption and the assumption that the migration patterns observed in 1996, 2001 and 2006 will continue to 2031. Scenario 2, “No ethnic mobility and converging fertility,” is identical to Scenario 1 except for fertility, which is assumed to be convergent rather than constant. Scenario 3, “Constant ethnic mobility and constant fertility,” differs from Scenario 1 only in that it assumes that intra-generational ethnic mobility will continue to 2031 instead of ceasing. Scenario 4, “Constant ethnic mobility and converging fertility,” differs from Scenario 3 only in its assumption on fertility, which is convergent rather than constant. Finally, Scenario 5, “Nil net migration on reserves,” assumes constant fertility, no intra-generational ethnic mobility and nil net migration on Indian reserves."</div>
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The study shows that by 2031, Saskatchewan will have 21 to 24 percent of its population of aboriginal identity compared to about 16 percent in 2006. Manitoba, will range from 18 to 21 percent from 16 percent in 2006. About 34 percent of aboriginal people were living in census metropolitan areas in 2006 and this will rise to 36 to 40 percent by 2031. In 2031, Thunder Bay, Winnipeg, Greater Sudbury, Saskatoon and Regina will have the largest proportion of aboriginal population</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgICulbOqiWdhWWBMtHGRwKJiHkqbM2jEjo944IxYsFzArzGAqSRNm2eZWH8EujeuCM2EPQM1QwiVCubNJHcbIn5HXkKg12ZaU6oKQJsTXcRoJhnjAnWbbFHhOtD6Id6t3Vk3IFFixIY6pR/s1600/slide1-149.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgICulbOqiWdhWWBMtHGRwKJiHkqbM2jEjo944IxYsFzArzGAqSRNm2eZWH8EujeuCM2EPQM1QwiVCubNJHcbIn5HXkKg12ZaU6oKQJsTXcRoJhnjAnWbbFHhOtD6Id6t3Vk3IFFixIY6pR/s640/slide1-149.jpg" width="640" /></a></div>
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The percentage of population by 2031 in major census metropolitan areas is depicted in the accompanying figure for the first four scenarios. By 2031, the study forecasts that Thunder Bay’s aboriginal population will range from 13.7 to 15.1 percent while Greater Sudbury’s will range from 8.6 to 13.2. As I mentioned earlier in this post, there is a strong probability that these forecasts are underestimates. This future is probably already here.</div>
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<b>16 Posts from December 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/where_s_the_giant_heart/"><b>Where's the Giant Heart?</b></a></div>
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<li class="li3">Dec 6, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canadian+cmas/"><span class="s2">canadian cmas</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/charitable+donations/"><span class="s2">charitable donations</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/generosity/"><span class="s2">generosity</span></a></li>
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A number of years ago, the local community television station in Thunder Bay ran commercials extolling Thunder Bay as the community with a "Giant Heart". Indeed, Thunder Bay has always prided itself as a generous community with a large community spirit, and substantial pools of volunteers ready to tackle projects. Yesterday, Statistics Canada released data on <a href="http://www.statcan.gc.ca/daily-quotidien/111205/dq111205a-eng.htm"><span class="s2">charitable donations</span></a> in 2010 from Canadian tax data that caused me to briefly question this conventional community wisdom. </div>
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According to the report, in 2010, Canadian taxfilers reported 8.3 billion dollars in charitable donations with 23.5 percent of all taxfilers claiming charitable donations on their tax return. The median value of donations in 2010 was 260 dollars. What is interesting is that data was also provided by Canadian CMAs and according to Statistics Canada the most generous donors were in Abbotsford-Mission, British Columbia followed by Calgary and Victoria. As the accompanying Figure 1 shows, when ranked from highest to lowest, Thunder Bay ranks in the bottom third at number 26. The other northern metropolis, Sudbury, fares even worse on this measure of generosity at number 28.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKu7PV6_Gl3dK-6ZXVVhgIP_83tTwIT1RBv0PhsAhyphenhyphenM6DvxHlJICTf4pcTjFeCtTO53t_efMgODsA8xdzfjazG8Ljqc36HrnqKpWGHwt-Nn147fZ4wxZf6Tvs1rNsJ84Jw4uGWgd3JPDrW/s1600/slide1-147.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKu7PV6_Gl3dK-6ZXVVhgIP_83tTwIT1RBv0PhsAhyphenhyphenM6DvxHlJICTf4pcTjFeCtTO53t_efMgODsA8xdzfjazG8Ljqc36HrnqKpWGHwt-Nn147fZ4wxZf6Tvs1rNsJ84Jw4uGWgd3JPDrW/s640/slide1-147.jpg" width="640" /></a></div>
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However, the median value of donations may not necessarily reflect generosity if the amount given is also tied to local unemployment rates and economic conditions. As well, this is taxfiler data and only reflects what people have claimed. Some people may not claim all of their donations. As well, these donations do not reflect the full range of charitable activity including volunteer time. In some communities, it may be that there is more of a spirit of activism and involvement rather than outright cash donations.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE5PF1VggPRM6cI8bzOdX5N3GbD_gt40J2ORzksGcirNFFxBR5cJQT8hHIS3g6SXspRlQcrNltMuguYA6l00BoYMaKcpWBHK7X_Ny4C86EX_09A8ItYH6BdBTqzP3SG3WFPliXr7xU22aE/s1600/slide1-148.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjE5PF1VggPRM6cI8bzOdX5N3GbD_gt40J2ORzksGcirNFFxBR5cJQT8hHIS3g6SXspRlQcrNltMuguYA6l00BoYMaKcpWBHK7X_Ny4C86EX_09A8ItYH6BdBTqzP3SG3WFPliXr7xU22aE/s640/slide1-148.jpg" width="640" /></a></div>
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If the communities are ranked by the percent of taxfilers actually claiming a donation (Figure 2), the range between the highest and lowest givers is much narrower. In this ranking, Thunder Bay does much better coming in at 13th place with 25.8 percent of taxfilers claiming a donation. Indeed, the top position this time is held by Regina, with Guelph and Ottawa-Gatineau next, while Abbotsford-Mission is near the bottom at 29th place with only 22 percent of taxfilers claiming a donation. While how much you give is important, the act of giving is also just as important and also a reflection of community generosity. Communities with higher rates of taxfilers claiming donations reflects a higher degree of engagement with giving even if the median amounts might be lower than communities with lower rates of engagement. The more interesting observation in all of this is the following: across Canadian, less than one-quarter of taxfilers claim a donation. It would appear that a large majority of Canadians either do not donate or if they do do not make a claim.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_s_urban_evolution_co/"><b>Thunder Bay's Urban Evolution Continues</b></a></div>
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<li class="li7"><span class="s3">Dec 5, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/core+specialization/"><span class="s2">core specialization</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transit/"><span class="s2">transit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban+evolution/"><span class="s2">urban evolution</span></a></span></li>
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The commencement of a new Thunder Bay Transit express service linking the City Hall south core terminal with the north core Water Street Terminal and with stops only at intercity mall and the Walmart Big-Box store complex is a sign of how city services have finally started to catch up with Thunder Bay's evolving urban reality. Moreover, it is also a signal that after nearly forty years of amalgamation, Thunder Bay's urban structure is finally moving towards a set of well-defined cores that builds on its urban history of two cities rather than tries to suppress it.</div>
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In the early years after amalgamation or "unification", Thunder Bay struggled to find itself but in the process downplayed its urban history as the former cities of Fort William and Port Arthur. A policy of "core-specialization" that would have allowed a unique role for each former core area and allowed the city to build around historic core areas took a long time in being devised but it is now slowly flowering. Such an approach sees the former Fort William downtown as "government-administrative", the former Port Arthur downtown as "tourism-entertainment" and the inter-city area as "commercial".</div>
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The former Fort William core has a revitalized City Hall complex and construction is underway and being completed on a new provincial court-house complex and the District Social Services Board Office. The Port Arthur downtown has Magnus Theatre, a Casino and a redeveloped water-front park and may yet become home to a new Thunder Bay Art Gallery as well as a possible events center. And of course, inter-city has become the city's retail core with three shopping mall complexes as well as numerous commercial infill between them. </div>
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The new express transit service is recognition that these areas of concentration are where activity is clustering in Thunder Bay and by making them more convenient and quicker to get to will promote additional development. However, this service is currently set up only for the "Holiday Rush" and for set times of the day. This service should be set up permanently and for longer periods of the day. As well, given the large student populations in Thunder Bay at Confederation College and Lakehead University and the medical services at Thunder Bay Regional Hospital, there are three more links to the express network that should be put in place. The inter-city mall express stop should have an express link to the College, University and Hospital. This would virtually complete a high speed urban transit network for the city connecting seven major clusters of activity though high frequency will be an important component to ensuring use. Combined with existing routes as feeder routes to these express hubs will provide a much more convenient and useful service. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/residential_revenue_shares_in_mu/"><b>Residential Revenue Shares in Municipal Taxation: A Comparison</b></a></div>
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<li class="li7"><span class="s3">Dec 4, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/business+tax+burden/"><span class="s2">business tax burden</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+taxation/"><span class="s2">municipal taxation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></span></li>
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Detailed financial data on municipalities is filed annually with the Ministry of Municipal Affairs and Housing in standardized Financial Information Returns accessible on the web. After examining the shift in own-source revenue burden towards residential and away from business in Thunder Bay over the period 1990 to 2010, I decided it was worthwhile examining the burden across a number of Ontario cities to see how much variation there is. The shift in municipal property tax burdens away from business and towards residential ratepayers in Ontario began in the 1990s. One would be interested in seeing if such a process has resulted in similar shares of own-source revenue from residential ratepayers by 2010.</div>
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I was able to calculate an estimate for own-source municipal revenue consisting of user fees and service charges, business property taxation (commercial and industrial) and residential taxation in 2010 for the five major cities in northern Ontario: Thunder Bay, Timmins, Sault Ste. Marie, Greater Sudbury and North Bay. As well, I also made the calculation for four other southern Ontario cities: Hamilton, Oshawa, Windsor and St. Catharines. The ratios are plotted in the accompanying figure and suggest that Thunder Bay is not alone in the shift onto residential ratepayers.</div>
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At 0.46 (or 46 percent), the share of own source municipal revenues accounted for by residential ratepayers in Thunder Bay is slightly above the share for Sudbury, the Sault and Timmins but well below that for North Bay, which sits at 54 percent. However, Thunder Bay’s residential share is below the four southern Ontario cities in the chart, which range from a low of 47 percent for Windsor to a high of 70 percent in Oshawa. Another way of looking at the numbers is also shown in the figure. Here, we plot the business property tax revenue share of total own-source revenue. At 20 percent, Thunder Bay’s is the second lowest of the five northern Ontario cities – below Greater Sudbury, the Sault and Timmins – and above North Bay’s. However, when compared to the other four southern Ontario cities, the share of own source revenues being paid by business in Thunder Bay is greater than in Hamilton or St. Catharines, on par with Oshawa and below Windsor.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTMeElP1ES624qLpnJKNp-f_nLtkxLv7Hk2jtEZeuN-1XzrLokfN7jE8OP5YKjIxdYQDjdOqNcemQX0JjZ1YaQlRrBY8I7Bk2C-tRPfd6eiJhY8a0RkYNrTIOHdFyZDJpBeB-ZFsJQEOyU/s1600/slide1-146.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTMeElP1ES624qLpnJKNp-f_nLtkxLv7Hk2jtEZeuN-1XzrLokfN7jE8OP5YKjIxdYQDjdOqNcemQX0JjZ1YaQlRrBY8I7Bk2C-tRPfd6eiJhY8a0RkYNrTIOHdFyZDJpBeB-ZFsJQEOyU/s640/slide1-146.jpg" width="640" /></a></div>
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What does this mean? On one level, it is difficult to draw any conclusions given the small size of the sample. A proper comparison would require a much larger number of Ontario cities. At the same time, within the set of five major northern Ontario cities, it would appear that the share of own source municipal revenues from residential ratepayers is about the same. The share from business taxation is lowest in Thunder Bay and North Bay while it is quite a bit higher in Greater Sudbury and Timmins. Finally, the residual share – from user fees and services charges - is highest in Thunder Bay and Sault Ste. Marie, followed by Timmins and then much lower in Greater Sudbury and North Bay.</div>
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The share of own source municipal revenues in Thunder Bay coming from business property taxation may be high relative to Hamilton or St. Catharines but it is low compared to Sudbury, the Sault or Timmins. Thunder Bay’s revenue share from residential ratepayers is similar to other northern Ontario cities but low compared to the four southern Ontario cities being examined here. So, if the City of Thunder Bay says that there is an “equity case” for raising the revenue share paid by residential ratepayers and reducing that of business owners, what is the comparison group? It certainly cannot be because residential ratepayers are providing a smaller share of revenues than business – we know that is not the case.</div>
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If the City of Thunder Bay wants to pursue a policy of “equity” when it comes to municipal taxation by reducing the property tax burden on business, then one possible set of comparators could be other cities. So, are we using southern Ontario cities as the model? North Bay? Does the City of Thunder Bay know what the basis of their “equity” case is? Or perhaps, what the City of Thunder Bay should be arguing is that they want to lower business property tax burdens even further in an effort to attract firms and jobs but that is a separate argument. In any event, based on these revenue shares, business property tax burdens are certainly not uncompetitive with respect to Greater Sudbury, the Sault or Timmins, our nearest major urban competitors.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/employment_statistics__a_quick_n/"><b>Employment Statistics: A Quick Northern Comparison</b></a></div>
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<li class="li3">Dec 2, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s2">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/unemployment/"><span class="s2">unemployment</span></a></li>
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The latest Labour Force Survey from Statistics Canada came out today and it shows that employment edged down in November nationally by about 19,000 jobs and that the unemployment rate nationally has risen by 0.1 percentage points to 7.4 percent. In Ontario, the unemployment rate is currently 7.9 percent, down from 8.1 percent in October. It is worth noting that unemployment rates in Ontario have been trending down over the two years. In northern Ontario, the unemployment rate for Sudbury has also been trending down while that for Thunder Bay appears to be in a stable oscillating pattern going neither up or down by very much within the 6-7 percent unemployment range. While Thunder Bay had a much lower unemployment rate than either Sudbury or Ontario over the last two years, that distinction has finally gone to Sudbury.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifAPsVr2FfNYx9ZOJtJvm4eM-HWQ6ldk-k9NkiaePdM6A4i5WSsX7lfWLecAY_TlmS4YhFLtmWhBNh3YSBDl6xmPfChEVLqGxJdU9b5Lntjul0aXWLlpmT41wadEXIPlgvAFauSIjQmmm7/s1600/slide1-145.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifAPsVr2FfNYx9ZOJtJvm4eM-HWQ6ldk-k9NkiaePdM6A4i5WSsX7lfWLecAY_TlmS4YhFLtmWhBNh3YSBDl6xmPfChEVLqGxJdU9b5Lntjul0aXWLlpmT41wadEXIPlgvAFauSIjQmmm7/s640/slide1-145.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/is_it_time_for_a_massive_nationa/"><b>Is It Time for a Massive National Infrastructure Program?</b></a></div>
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<li class="li3">Dec 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/infrastructure/"><span class="s2">infrastructure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/investment/"><span class="s2">investment</span></a></li>
</ul>
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The post-war economic boom gave way to a period of economic stagnation in western economies starting in the 1970s that resulted in a decline in long-term economic growth rates that was only partially reversed given the boom of the late 1990s. According to the neoclassical growth model, economic growth in the long-run is a function of the deepening of the capital to labour ratio. As a result, investment spending or capital formation is important and the share of your national output dedicated to capital formation is an important indicator of investment spending in the economy.</div>
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I was able to put together from three separate data sources a series for Canada on the ratio of investment to output. For the period 1870 to 1926, there is the national accounts data put together by Mac Urquhart at Queen’s which provides GNP estimates for Canada as well as an estimate of gross fixed capital formation. For the period 1926 to 1960 there is Historical Statistics of Canada, which provides GNP and an estimate of gross fixed capital formation. Finally, for the period 1961 to 2010, I was able to get annual series from Statistics Canada for GDP and gross fixed capital formation. Note that the estimate of gross fixed capital formation is for both business and government. </div>
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As the measure of investment activity I calculated the ratio of gross fixed capital formation to output (GNP/GDP) for Canada for the period 1870 to 2010. The share of GDP going to capital formation is but one estimate of investment activity but it seems like a reasonable one to use. Investment spending is the most volatile component of national output and certainly more variable than national output so fluctuations in the ratio should reflect fluctuations in investment rather than GDP changing faster than investment. The mean growth rate of nominal GDP from 1870 to 2010 was 6.4 percent and the standard deviation 7.8, whereas the mean for gross fixed capital formation was 0.9 percent and the standard deviation 11.0.</div>
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The accompanying figure plots the investment-output ratio and it shows the most spectacular investment boom in Canadian history was the period from 1896 to 1912 when the investment-output ratio rises from 0.115 to reach a peak of 0.341. This was of course the wheat boom/western settlement period that saw massive capital infrastructure put in place for the western wheat economy. The ratio collapses during the First World War and recovers during the 1920s but modestly before collapsing during the Great Depression to the low of 0.096 in 1934. There is a slight recovery but then the ratio drops during the Second World War to the lowest it has ever been at 0.0814. The period 1944 to 1957 sees a steadily rising investment-output ratio –the post-war boom era but since the 1950s the ratio while fluctuating has never since dropped to the depths of the 1930s or the late nineteenth century. No doubt, interventionist government economic policy did much to stabilize fluctuations in the investment-output ratio in the period since World War II.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMtgTyixIjvBn_EtM0XoASzdnRJ3pFD_wisnlYUxF9uiGlTS3Q3I3EsArMHcIi8SL6nXqHsw_0cqwpSZLQnJR89dLLK1UsQ54k1w0l7IISOIl3lOpxC7OE6_NgxooDlVwAcAoenaa2NMxQ/s1600/slide1-144.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMtgTyixIjvBn_EtM0XoASzdnRJ3pFD_wisnlYUxF9uiGlTS3Q3I3EsArMHcIi8SL6nXqHsw_0cqwpSZLQnJR89dLLK1UsQ54k1w0l7IISOIl3lOpxC7OE6_NgxooDlVwAcAoenaa2NMxQ/s640/slide1-144.jpg" width="640" /></a></div>
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However, the investment-output ratio has not reached the height achieved during the post-war boom – the post-war peak of 0.259 achieved in 1957. Indeed, the long-term trend since 1957 seems to be a declining investment output ratio despite the period of increase since the mid-1990s. Is the long-term slide in economic growth and productivity since the 1970s also rooted in the decline in gross fixed capital formation’s share of GDP? Given that much of our aging national infrastructure was built during the boom of the 1950s and early 60s, it stands to reason that a major renewal program launched now would boost investment-output ratios substantially and fuel more robust long-term economic growth. Canada's fiscal position is quite strong relative to many other countries and could engage in the deficit financing that would boost investment in infrastructure and capital spending. I think a key component of such a national infrastructure program could be a <a href="http://fullcomment.nationalpost.com/2011/04/26/fp-comment-fix-no-1-highway/"><span class="s2">national highway project</span></a>. Canada is the largest developed country in the world without a system of fully grade-separated roadways that allow uninterrupted traffic flow between its major urban centres. Such a project would provide both short-term and long-term stimulus to the economy via the short term construction impact and the long-term effects of transportation costs and travel times.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario%E2%80%99s_battered_manufacturi/"><b>Ontario’s Battered Manufacturing Sector</b></a></div>
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<li class="li3">Dec 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manufacturing/"><span class="s2">manufacturing</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
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The release of the Ontario fall fiscal and economic statement is usually accompanied by a lot of economic data on the recent performance of the Ontario economy which when combined with past reports allows one to get an interesting picture of economic change in the province. I took the employment data provided by economic region both for total employment as well as for manufacturing to see just how bad the manufacturing sector’s losses have been and particularly how they varied across Ontario.</div>
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For Ontario as a whole, total employment between 1999 and 2011 rose from 5.688 million jobs to 6.610 million. However, manufacturing employment dropped from 1.049 million to 781 thousand jobs – a loss of 268,000 jobs. As a share of total employment, manufacturing in Ontario went from 18.4 to 11.8 percent - a remarkable change. Moreover, no part of the province was untouched by this drop. As Figure 1 shows, every single economic region of the province saw a drop in its manufacturing employment. In percentage terms, the largest drop was in Northwestern Ontario where 53.8 percent of the manufacturing jobs were lost. The smallest declines were in London and Kingston-Pembroke which both saw a decline of 15.4 percent. </div>
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Manufacturing now makes up a much smaller share of Ontario’s employment (Figure 2). The biggest declines in the employment share of manufacturing seem to have occurred in Ontario’s north. In 1999, manufacturing employed 16.8 percent of employees in Muskoka-Kawartha, 9.6 percent in the Northeast and 11.6 percent in the northwest. In 2011, those figures are 8, 7.5 and 6 percent respectively. The share of employment in manufacturing has effectively been halved in the Muskoka-Kawartha region and in the Northwest – where manufacturing’s share of employment was already below the Ontario average. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiF5q8jHQTOhGQWh47jtdgOiBMmx66_W1tJV3G6NDdC6FdgJH0cnzsQ91DbXsd_RXeXl3M3zUVE-OHCczUoB6fk25obC0b31tMS6oIFtnQSI-Klm3BMYxI7jcmPBHDfAoN75-8uyWrqn58v/s1600/slide1-142.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiF5q8jHQTOhGQWh47jtdgOiBMmx66_W1tJV3G6NDdC6FdgJH0cnzsQ91DbXsd_RXeXl3M3zUVE-OHCczUoB6fk25obC0b31tMS6oIFtnQSI-Klm3BMYxI7jcmPBHDfAoN75-8uyWrqn58v/s640/slide1-142.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbhbjBfQa-xhLyg9F5uOsAAYb3Gl6RYrkgmvAt5jnn61qnFmOi4BR1Q0QSNWTjuQ-zfQW1_BwYgS5yf10dEv7sTWEBovgXcgvDWAp810M1EX6-1VRXwZUfKxsBNvsoiWgrlUW-f1lhn56n/s1600/slide1-143.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbhbjBfQa-xhLyg9F5uOsAAYb3Gl6RYrkgmvAt5jnn61qnFmOi4BR1Q0QSNWTjuQ-zfQW1_BwYgS5yf10dEv7sTWEBovgXcgvDWAp810M1EX6-1VRXwZUfKxsBNvsoiWgrlUW-f1lhn56n/s640/slide1-143.jpg" width="640" /></a></div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-89272111662051684582016-12-14T15:51:00.001-08:002017-05-28T05:51:59.951-07:00November 2011 Posts<div class="p1">
<b>25 Posts from November 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ranking_federal_employment/"><b>Ranking Federal Employment</b></a></div>
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<li class="li3">Nov 28, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canadian+cmas/"><span class="s2">canadian cmas</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+employment/"><span class="s2">federal employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ranking/"><span class="s2">ranking</span></a></li>
</ul>
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Statistics Canada has released its <a href="http://www.statcan.gc.ca/daily-quotidien/111128/dq111128c-eng.htm"><span class="s2">newest numbers for federal government</span></a> employment in census metropolitan areas and they show increasing concentration of federal government employment in the Ottawa-Gatineau area with reductions in most of the other CMAs. Ottawa-Gatineau accounts for nearly one-third of federal employment, which in turn represents 19.4 percent of employment in the Ottawa-Gatineau CMA. This is the highest share of total employment accounted for by the federal government among Canadian CMAs. The next highest is Kingston at 8.7 percent, followed by Halifax at 7.7 percent. The three lowest are Brantford at 0.3 percent, Barrie at 0.2 percent and Oshawa at 0.1 percent. Of these 34 CMAs, Thunder Bay is ranked 16<span class="s3"><sup>th</sup></span> in terms of its federal share of total employment while Sudbury is ranked 10<span class="s3"><sup>th</sup></span>. Federal employment has been one of the recent bright spots in Thunder Bay. Between 1990 and 1998, federal employment in Thunder Bay dropped 29 percent but then began to recover and it now approximately where it was in the early 1990s. It should be noted that in 2011, Sudbury had 2,194 federal employees compared to 938 for Thunder Bay.</div>
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<b>Figure 1</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPhAX-J8w28TIHNzcraUg-UoNOTZJ0_OMw4vRxmSupQD44cxv_ynmDcY18xy0oJsNO_c1twcNN19x4zOgCbtz2MbFSsLN3CIaSoU6TchV9lBqgoQu8OEMCNTdhMR2fzwPI5QUfUrbk8yDv/s1600/slide1-140.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPhAX-J8w28TIHNzcraUg-UoNOTZJ0_OMw4vRxmSupQD44cxv_ynmDcY18xy0oJsNO_c1twcNN19x4zOgCbtz2MbFSsLN3CIaSoU6TchV9lBqgoQu8OEMCNTdhMR2fzwPI5QUfUrbk8yDv/s640/slide1-140.jpg" width="640" /></a></div>
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<b>Figure 2</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz3HFSOdWAMIuL5fWvaJxwihOxeSNNCFD5AWhz8B5NqhWqNX5b__2fvR2hMMyM-LhTeTTjHUZ3rSOcYQm6NU5JI46Wzpd4ViklXHe3Kn2J2WGPyMAo3tDXDUZ2I4Rf_DUhZNojVYA272Pv/s1600/slide1-141.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz3HFSOdWAMIuL5fWvaJxwihOxeSNNCFD5AWhz8B5NqhWqNX5b__2fvR2hMMyM-LhTeTTjHUZ3rSOcYQm6NU5JI46Wzpd4ViklXHe3Kn2J2WGPyMAo3tDXDUZ2I4Rf_DUhZNojVYA272Pv/s640/slide1-141.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/municipal_financial_reporting_an/"><b>Municipal Financial Reporting and Taxpayer Equity</b></a></div>
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<li class="li7"><span class="s4">Nov 27, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/%C2%A0equity/"><span class="s2"> equity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/finances/"><span class="s2">finances</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+taxation/"><span class="s2">municipal taxation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tax+burdens/"><span class="s2">tax burdens</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transparency/"><span class="s2">transparency</span></a></span></li>
</ul>
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As a result of my November 23<span class="s3"><sup>rd</sup></span> post on municipal finances and my lament that more detailed revenue data was not available in City of Thunder financial statements, I received several suggestions about where such data might be available. It turns out each municipality files detailed financial data with the Ministry of Municipal Affairs and Housing every year in a standardized Financial Information Return. However, it is not an easy web site to track down (<a href="http://oraweb.mah.gov.on.ca/fir/welcome.htm"><span class="s2">here is the link</span></a> if anyone else wants to visit) and the returns are Excel files with multiple schedules that take a substantial amount of effort to go through and collect required data from. Nevertheless, I have been able to update my time series for Thunder Bay for the period 2005 to 2010 and my thanks to David Muir, FCA and a retired provincial civil servant in Toronto, who shall remain anonymous, for helping point me to this data. The information transfer role of the web is truly a marvelous thing.</div>
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Interestingly enough, last week also saw the release of a new study from the CD Howe Institute called <a href="http://www.cdhowe.org/holding-canada%E2%80%99s-cities-to-account-an-assessment-of-municipal-fiscal-management/15726"><span class="s2">Holding Canada’s Cities to Account: An Assessment of Municipal Fiscal Management</span></a> by Benjamin Drachis and Bill Robson. According to the authors:</div>
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“Cities are the most visible level of government for most Canadians, providing services such as waste collection, policing and transit. Yet their budgets are the most opaque of any level of government … Councillors and taxpayers who seek to hold these municipal governments to account face a daunting task.”</div>
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Needless to say, my experience leads me to concur with the authors of this report. It is not easy to collect this data and once you find it, trying to get it into a form that you can analyze and interpret is not terribly convenient. It is ironic that the level of government in Canada that is the most grass roots and the closest to the average citizen has the most convoluted set of financial statistics. If the goal of municipal financial administrators was to confuse the public, they could not be more successful. One does not envy the work that municipal councilors need to do to keep tabs on the finances of their municipalities. For the average citizen, the lack of transparency is even more troubling.</div>
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Nevertheless, I am now able to update my October 25<span class="s3"><sup>th</sup></span> post. I was able to calculate an estimate for own-source municipal revenue consisting of user fees and service charges, business property taxation (commercial and industrial) and residential taxation. Note that the revenues received from the dividend paid by TBayTel - as before- are excluded. I am looking at simply the revenue obtained by charging property owners and users of municipal government provided services. Figure 1 shows that during the period 1990 to 1997, revenues (in dollars) from all three of these major sources was approximately the same. However, starting in 1998, the revenue from both user fees and residential taxation began to soar while business tax revenues stayed relatively flat. Over the period 1999 to 2010, the average annual growth rate in municipal revenue from residential taxation was 5.1 percent, from business taxation 1.6 percent and from user fees it was 6.6 percent. What this has meant is residential taxation and user fees have over time become a bigger share of municipal revenue, and business taxation a smaller share.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZpgRR2DQ690CifxVVQTbGgP0z5uLwlh6tu9MsBt-2EZylWLMshjqMTHwWn_HMI9oTzPecuKzqJ-lRtW7NZld6x5rOhdMhDOqni8BzUwCKoz3LWsIKD9DROF8hZVnHx1LI4EpeI2C5etRH/s1600/slide1-138.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZpgRR2DQ690CifxVVQTbGgP0z5uLwlh6tu9MsBt-2EZylWLMshjqMTHwWn_HMI9oTzPecuKzqJ-lRtW7NZld6x5rOhdMhDOqni8BzUwCKoz3LWsIKD9DROF8hZVnHx1LI4EpeI2C5etRH/s640/slide1-138.jpg" width="640" /></a></div>
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As Figure 2 shows, this trend was apparent before 2005 and the updated numbers show that it has continued since 2005. In 1990, residential taxation accounted for 34 percent of own source revenue, business taxation 35 percent and user fees 21 percent. In 2005, residential taxation’s share had risen to 44 percent, user fees to 29 percent but the business taxation share had fallen to 21 percent. In 2010, residential taxation's share had risen to 46 percent, user fees had reached 31 percent and business taxation further declined to 20 percent. Put another way, by 2010, for every dollar raised by business property taxes, the City of Thunder Bay was raising another $2.31 cents from residential taxation. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3M8cGsXJqXjNp3FWPIrjdm3KB1scjaRg7Py_7PNPizghecjmhH4aHUvZDq6WBGH9ZNRMUzzyU4GdV2cTkK1kDVOB50kb5AxoXH_ISNvefmz61toGWTLDRTl_1-J0-HD0iTEWR05sWoYE/s1600/slide1-137.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhV3M8cGsXJqXjNp3FWPIrjdm3KB1scjaRg7Py_7PNPizghecjmhH4aHUvZDq6WBGH9ZNRMUzzyU4GdV2cTkK1kDVOB50kb5AxoXH_ISNvefmz61toGWTLDRTl_1-J0-HD0iTEWR05sWoYE/s640/slide1-137.jpg" width="640" /></a></div>
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Given these trends, it is amazing that a proposal was actually floated to shift even more of the burden to residential taxation and then to make the argument that it was based on the need for “equity”. Equity for whom? That such an argument was even contemplated reveals the lack of information and knowledge amongst ratepayers and probably even councilors in Thunder Bay as to the composition and distribution of the tax burden. </div>
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Over the last decade, municipal revenues from residential property taxation and user fees in Thunder Bay have been growing at rates well in excess of inflation and population growth, and this during a time of substantial economic transition in the city’s economy. After all, according to the conference Board, Thunder Bay’s GDP over the last few years has probably shrunk by about ten percent. Jean Baptiste Colbert, the Minister of Finance during the reign of Louis XIV remarked that taxation was the art of plucking the goose with the minimum amount of hissing. In the case, of Thunder Bay residential ratepayers, the goose has been plucked and well cooked.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_wages_and_economic_decli/"><b>Ontario Wages and Economic Decline</b></a></div>
<ul class="ul1">
<li class="li3">Nov 27, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/decline/"><span class="s2">decline</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/weekly+wages/"><span class="s2">weekly wages</span></a></li>
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Well, there was more bad news for Ontario’s sputtering economy from Statistics Canada last week when the release of <a href="http://www.statcan.gc.ca/daily-quotidien/111124/dq111124a-eng.htm"><span class="s2">average weekly earnings</span></a> data showed that over the period September 2010 to September 2011, Ontario’s year-over-year earnings declined 1.3%. Ontario was at the bottom of the growth chart in terms of average weekly earnings and one of only two provinces to show a decline – the other was Nova Scotia. (See Figure 1)Every other province posted positive annual growth in its average weekly earnings. According to Statistics Canada, the declines in Ontario were “spread across several service industries, most notably in finance and insurance; educational services; wholesale trade; health care and social assistance as well as public administration.” </div>
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<b>Figure 1 (Source: Statistics Canada Daily November 24th)</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6Z3UHjnEIqZH9cuOU_rrjmsrlboI7bJDrYVbCrWvRrqPNn_ueLFrtyOZkbpkesSkjl5KiotLl_e9YugdZXT9SVE6QdOFPp6CLqSLasTfp8XoqkQ4CU42JrtlO4dXrEjaUkYrPNH0HH6_I/s1600/preview_ontariowagedecline.jpg" imageanchor="1"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6Z3UHjnEIqZH9cuOU_rrjmsrlboI7bJDrYVbCrWvRrqPNn_ueLFrtyOZkbpkesSkjl5KiotLl_e9YugdZXT9SVE6QdOFPp6CLqSLasTfp8XoqkQ4CU42JrtlO4dXrEjaUkYrPNH0HH6_I/s640/preview_ontariowagedecline.jpg" width="564" /></a></div>
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<b>Figure 2</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiB5K8DYHdYYSotj-xccwx-yTgT53hT0ZAYgDBaRUoZKTKseCq1ux6dGotyc9bZDNNHMGDpqWsJNC3qaLg4-_6Saq5_-VWvK4igREJuVE4jFyFZ4bxt-5C8uN8TYXNJAm9S9qOki9KPkSra/s1600/slide1-139.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiB5K8DYHdYYSotj-xccwx-yTgT53hT0ZAYgDBaRUoZKTKseCq1ux6dGotyc9bZDNNHMGDpqWsJNC3qaLg4-_6Saq5_-VWvK4igREJuVE4jFyFZ4bxt-5C8uN8TYXNJAm9S9qOki9KPkSra/s640/slide1-139.jpg" width="640" /></a></div>
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Ontario still has the third highest average weekly wages amongst Canada’s provinces but last year it was second highest. While Ontario has had lower wages than Alberta for some time, it has now also been surpassed by Saskatchewan (See Figure 2). If the current annual rate of increase continues, Ontario will soon be passed by Newfoundland too. A long term perspective is provided by the accompanying Figure 3. In 2000, average weekly earnings in Ontario (excluding overtime) were the highest of the ten provinces. Ontario was passed by Alberta in 2004 and remained in second place until this year when it was passed by Saskatchewan. </div>
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<b>Figure 3</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6rBTWRvRoUV6F43VZeNQ92LLZv5td26li2ua_a2bXyZIFSWxuMFV_kmG1qOxH3JezpbPKqy-jXdEE2oQ-jfHP-TL1upD2nzklU1Z9IpLa99OWXb87vFB8ZzUXI6vYULOcx89Sj3KSWkm3/s1600/slide1-135.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6rBTWRvRoUV6F43VZeNQ92LLZv5td26li2ua_a2bXyZIFSWxuMFV_kmG1qOxH3JezpbPKqy-jXdEE2oQ-jfHP-TL1upD2nzklU1Z9IpLa99OWXb87vFB8ZzUXI6vYULOcx89Sj3KSWkm3/s640/slide1-135.jpg" width="640" /></a></div>
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The charitable interpretation of all this is that the Canadian federation is rebalancing and that there is a movement towards a long-term equilibrium of more diverse economic opportunity across the country. Ontario's dominance of the Canadian economy is giving way to a much more balanced federation. The less charitable interpretation especially given the low growth of real per capita GDP and Ontario’s poor labour productivity growth is that these numbers are simply another indicator of Ontario’s economic decline.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_is_turning_on/"><b>Northern Economist Is Turning One Year Old!</b></a></div>
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<li class="li3">Nov 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/anniversary/"><span class="s2">anniversary</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/international/"><span class="s2">international</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+economist/"><span class="s2">northern economist</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/visitors/"><span class="s2">visitors</span></a></li>
</ul>
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Northern Economist is celebrating its first year on the Web next week. Its first postings were put online on November 30th last year. The mission of the blog was to provide commentary and analysis of economic issues and policy from a northern Ontario perspective and nearly 200 posts later I think I can safely say the mission has been accomplished. The posts have covered a wide range of issues - local, regional provincial, national and international and I have endeavored to especially cover economic issues at the regional level that might not necessarily receive much attention. </div>
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I am of course pleased to watch the readership of this blog rise and on a monthly basis there are now several thousand visits. Moreover, only about half of the visitors come from Thunder Bay and Northwestern Ontario - most of the remainder are spread out across Canada and the United States. There are however visitors from around the world and I've attached a recent screenshot to illustrate the global audience for Northern Economist. Over the last few days, there have been visitors from every province in Canada. From the United States, there have been visitors from California, Washington State, Nevada, Iowa, New York and Washington, D.C.. Internationally, there have been recent visits from the UK, Poland, Belarus, Greece, Cyprus, South Africa, Malaysia and the Philippines.</div>
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To all the visitors to Northern Economist, I thank you for your visits. I look forward to another year of commentary and analysis.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNi1HzueY0cFF6ghiAedCC5xCpxvlDPMjnOfAgrroqk9HyfuL60jdkt8MhvajLOd8IBkA7fBLuituyd3OKfMPI6s7Gj0RVNi_sdbgbLEtRBxNoZ2yUcETglzbOoFMrTP-qRhTSrWfDy5O9/s1600/preview_slide1-132.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNi1HzueY0cFF6ghiAedCC5xCpxvlDPMjnOfAgrroqk9HyfuL60jdkt8MhvajLOd8IBkA7fBLuituyd3OKfMPI6s7Gj0RVNi_sdbgbLEtRBxNoZ2yUcETglzbOoFMrTP-qRhTSrWfDy5O9/s640/preview_slide1-132.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_s_fall_economic_statemen/"><b>Ontario's Fall Economic Statement: An Assessment</b></a></div>
<ul class="ul1">
<li class="li3">Nov 24, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/bonds/"><span class="s2">bonds</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+statement/"><span class="s2">economic statement</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/finances/"><span class="s2">finances</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
</ul>
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The Ontario government released its fall economic statement yesterday (2011 Ontario Economic Outlook and Fiscal Review) and apparently after the silence of the election it is now more aware that the world economy is slowing and that Ontario will experience slower economic growth. Indeed, this has been noted by no other authority than <a href="http://online.wsj.com/article/BT-CO-20111123-714807.html"><span class="s2">The Wall Street Journal</span></a>, which writes:</div>
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Canada's largest province, Ontario, sharply downgraded its medium-term economic forecast on Wednesday, warning that modest growth would be the "new normal" for its economy for the foreseeable future. Ontario, an economy that relies heavily on manufacturing to drive growth, now anticipates its gross domestic product to expand just 1.8% this year, below the earlier 2.4% projection. The revision is deeper in 2012, as the Ontario economy is set to advance by 1.8%, versus the 2.7% forecast in the original 2011 budget. "For the foreseeable future, modest economic growth will be the new normal here in Ontario, as elsewhere," the recently re-elected Liberal government said in its economic update. Still, the province said it expects its fiscal 2012 deficit, of C$16 billion (US$15.4 billion), or roughly C$300 million better than forecast. But at about 2.5% of GDP, the deficit marks a slight deterioration from the previous fiscal year and remains the deepest fiscal hole among Canada's 10 provinces.</div>
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Essentially, the fall economic statement shows a deteriorating economic situation but the government insists it is still on track to balance its budget by 2017-18 without lowering spending or raising taxes. As well, the government says that it will not introduce major austerity measures and will go ahead with its initiatives in health and education and the Green Energy Program. This is apparently a program of disciplined fiscal management and will help Ontario avoid what is going on in Europe as governments there float bond issues at ever higher interest rates. According to the fall economic statement:</div>
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<i>From 2007 through 2009, the interest rates on Spanish and Italian</i></div>
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<i>government bonds were similar to those paid by Ontario. By early</i></div>
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<i>November of this year, those countries pay from 2.4 to 3.2 percentage</i></div>
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<i>points higher on 10-year government bonds. That means more tax dollars</i></div>
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<i>are going to service debt instead of protecting schools and hospitals.</i></div>
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<i>Disciplined fiscal management will keep this from happening in Ontario.</i>(See 2011 Ontario Economic Outlook and Fiscal Review, p. 8).</div>
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Hopefully, Ontario will not become the new Spain or Italy when it comes to public finances. We of course all hope that the provincial finance minister and the Ontario government are correct in their assessment. Interestingly enough, the interest rate of Ontario bonds has reached its widest spread this year relative to Canadian government bonds. An Ontario government 10 year bond now trades at about 1 percent higher than a Canadian government 10 year bond which is up from a 0.6 percent spread earlier in 2011.</div>
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The fall economic statement is essentially a stand-pat document that prepares the public with the information that the situation may be worsening but does nothing of a major nature to address it yet. This is because the provincial government is going to wait for a plan from Don Drummond in January on restructuring and reinventing government and will make that the basis for their fiscal initiatives in the spring budget. As well, given the constraints of a minority government, the provincial government is probably still hoping that the world economy may suddenly turn around and improve the economic outlook by spring. The question is will the worsening global economic situation move faster than the Ontario government's ability to react?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/provincial_government_health_spe/"><b>Provincial Government Health Spending: The Equity Dimension</b></a></div>
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<li class="li3">Nov 23, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/equity/"><span class="s2">equity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+spending/"><span class="s2">health spending</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/"><span class="s2">provinces</span></a></li>
</ul>
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The federal and provincial/territorial health ministers will be meeting in Halifax on Thursday and Friday and will be preoccupied with the sustainability of health expenditures and the coming negotiations over the renewal of the health care accord. They should also be preoccupied with some of the large differences in real per capita provincial government health spending given the implications of such differences for the quantity and quality of health care. In 2009, for example, Newfoundland spent 20 percent more than the national average while Quebec spent about 11 percent less. Ontario tended to be a bit above the average until the late 1990s and has since slipped a bit below. The question that arises is if you are spending twenty percent more than the national average, is the quality of your health care twenty percent better? If not, are there substantial savings from adopting the practices of the lower spenders? After all, if every province had its real per capita spending on health match Quebec’s, you would be looking at saving billions of dollars in government health spending. Read more in my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/11/provincial-government-health-spending-the-equity-dimension.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a>.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/municipal_financial_reporting__m/"><b>Municipal Financial Reporting: More Is Preferred to Less</b></a></div>
<ul class="ul1">
<li class="li3">Nov 23, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/financial+statements/"><span class="s2">financial statements</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+taxation/"><span class="s2">municipal taxation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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We live in an age of accountability and numerous reports are often generated to demonstrate that government is indeed providing stewardship of public money. Yet, oddly enough, there seems to be less and less effective information that the average citizen can conveniently access at the same time that there are more and more official reports. Case in point: financial statements from the City of Thunder Bay.</div>
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I had constructed some time series data on municipal revenues in Thunder Bay using the summary financial statements and auditor’s reports for the period from 1990 to 2005. In light of the debate over taxation that began in October with a discussion of shifting more of the burden to residential users, I decided to update those numbers. The summary financial statements from the city of Thunder Bay I used to construct my data set prior to 2005 had a consolidated statement of financial position with a detailed municipal revenue breakdown that divided revenues into the following categories: (1) residential and farm taxation (2) commercial and industrial (3) current year’s tax write-offs (4) taxation from other government and 5) fees and service charges. Since then, the summary financial statement has shrunk substantially in size. Moreover, the consolidated statement of financial operations now only reports total taxation revenues without a breakdown. This breakdown is also not available in the supplemental volume that supports the summary volume.</div>
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As a result, my October 25<span class="s3"><sup>th</sup></span> post <a href="http://ldimatte.shawwebspace.ca/blog/post/equity_in_municipal_taxation/"><span class="s2">“Equity in Municipal Taxation”</span></a> was only able to plot Thunder Bay residential taxation as a percent of total municipal tax and fee revenue for the 1990 to 2005 period. I am unable to collect data for the period 2005 to 2010 to evaluate specifically if the share accounted for by either business or residential has changed substantially since then. There has obviously been a change in accounting practices and the City of Thunder Bay feels that the detailed revenue breakdown is no longer necessary. I would beg to differ. Given the debate focused on shifting the burdens, the public has a right to know what the distribution of the burden currently is and how it has changed over time. I am not interested in relying on public pronouncements from municipal officials as to what the business or residential share is without the ability to see and analyze the basic numbers myself.</div>
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The essence of democracy is that otherwise ordinary people should be able to publicly access the basic documentation of their government and understand where their money is coming from and where it is going. It is not enough to simply publish reports to show accountability, one has to provide information that can be used. I would like to see the data on the current breakdown in City of Thunder Bay taxation revenue that used to be provided so I can measure if there have been further changes in the distribution over the last five years. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_winn_2/"><b>Northern Economist in the Winnipeg Free Press</b></a></div>
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<li class="li3">Nov 22, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+expenditure/"><span class="s2">health expenditure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba/"><span class="s2">manitoba</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/physicians/"><span class="s2">physicians</span></a></li>
</ul>
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<a href="http://www.winnipegfreepress.com/opinion/westview">The View from the West</a></div>
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Winnipeg Free Press - PRINT EDITION</div>
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<b>The role of MDs in health spending</b></div>
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by Livio Di Matteo</div>
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The recent release of National Health Expenditure Trends by the Canadian Institute for Health Information puts total health expenditure in Canada at $192.9 billion in 2010 and $200.5 billion in 2011 -- annual increases of 5.9 and four per cent respectively. This year's release was also accompanied by a report titled Health Care Cost Drivers: The Facts, which finds the period from 1998 to 2008 was one in which public health care spending grew at an average of 7.4 per cent annually -- double the rate of government revenue.</div>
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Physician spending was highlighted as one of the fastest-growing public-sector health categories of recent years, with half of the growth attributable to increases in physician fee schedules. Economists are not surprised that physicians have been able to negotiate generous fee increases given the period of physician shortages. However, it should be noted that the period since 2003 has seen a rebound in the number of physicians due to higher medical-school enrollment and the immigration of international medical graduates.</div>
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Governments are often conflicted when it comes to public health care. While more physicians means more services and access for the public, it also means more public spending. With health care sustainability once again moving into the forefront of policy discussion in Canada, physicians and their role as health-system gatekeepers will be coming under scrutiny. Indeed the cost and effectiveness of many procedures will likely be an area of examination.</div>
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One of the arguments used to restrict medical-school admissions in Canada in the early 1990s was that physicians were a primary cost driver in the health system because of their role as gatekeepers. Reduce the number of physicians and replace them with nurse-practitioner teams and it was felt cost savings would automatically ensue. The result was a physician shortage. Moreover, after a short pause, health-care spending continued to mount, driven by drugs, diagnostic technology and public-health initiatives. The recent increase in physician numbers makes up for the reductions of the 1990s but has also been fueling expenditure increases.</div>
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How does Manitoba compare? Between 1975 and 1998, the number of family physicians in Manitoba grew by 34 per cent and the number of specialist physicians by 49 per cent. The number of family physicians declined between 1991 and 1996, though the number of specialists continued to increase. Since 1998, the number of family physicians has grown by 15 per cent while the number of specialists has grown by seven per cent. Spending on physicians by the provincial government rose from $64.4 million in 1975 to reach $382 million by 1998 and then more than doubled to reach $856 million by 2009.</div>
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Growth in total numbers does not take into account population growth. When examined as the number of physicians per 10,000 people, the numbers show that the ratio of physicians to population stopped growing in Manitoba in the 1990s. Thus, while there are more physicians overall, given the increased demands of new diagnostic technology and a growing population, it may seem to many that there are not enough physicians to go around. As well, spending on physicians also needs to be adjusted for both inflation and population growth. When this is done, real per capita provincial government physician spending grew 49 per cent between 1998 and 2009, while total real per capita provincial government health spending grew 52 per cent. Given that physician spending constitutes only about 18 per cent of provincial government health spending in Manitoba, it means there has been a lot of growth in other categories too.</div>
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While physician spending is an important cost driver, the drivers of public health-care spending are also a complex interaction between physician decision-making, diagnostic and drug technologies, population growth and aging, and the cost and deployment of other health human resources used in treatment. Indeed, a positive correlation between physician numbers and health spending is not automatic. Across Canada, the top three spenders in 2009 when it comes to real per capita provincial government health spending were Newfoundland, Manitoba and Saskatchewan, and the bottom three were New Brunswick, PEI and Quebec. On the other hand, the top three provinces in terms of total physicians per 10,000 population were Nova Scotia, Quebec and Newfoundland, while the bottom three were Manitoba, Saskatchewan and PEI. Obviously, public health-care spending is complex and care needs to be taken that cost-control approaches to health-system sustainability use a balanced approach rather than setting simplistic targets.</div>
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Livio Di Matteo is professor of economics at Lakehead University.</div>
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Republished from the Winnipeg Free Press print edition November 21, 2011 A11</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/funding_infrastructure/"><b>Funding Infrastructure</b></a></div>
<ul class="ul1">
<li class="li3">Nov 21, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/infrastructure/"><span class="s2">infrastructure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+taxes/"><span class="s2">municipal taxes</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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Like many municipalities in Ontario, the City of Thunder Bay faces the need to rebuild and maintain an aging network of physical urban infrastructure. City administration would like to raise property taxes to pay for repairs to roads, bridges and sewers as part of a long-term asset management plan. Given that the total value of the city's infrastructure is in the billions of dollars, we are looking at the expenditures of millions of dollars per year simply in maintenance alone.</div>
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The current council still has three years to go in its mandate which means after much wringing of hands and debate they will agree to a tax increase to fund the spending, gambling that the next election is still three years away and that most voters will have short memories. As a result, there is no point in arguing whether or not the city should raise taxes. They will. Indeed, given the crumbling infrastructure that is partly rooted in decades of tax competition between the former cities of Fort William and Port Arthur, it would not be responsible to ignore the needed repairs.</div>
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The real issue is management of the problem fiscally and the proper use of our tax dollars. First, if they are to maintain credibility on issues of municipal public finance, our councilors are going to have to set priorities. If maintaining our infrastructure is a priority, then they may have to rein in new spending on new infrastructure that will add to the deferred maintenance burden down the road. On the one hand, we have an infrastructure maintenance deficit and on the other hand we are building a massive waterfront development project and are planning for a new arena. This will also require maintenance in the future. On top of it all, they have been discussing shifting more of the burden to residential tax payers - something that has been in progress for a decade because of the decline of the industrial tax base.</div>
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Second, the pay as you go approach to municipal infrastructure should be revisited. Infrastructure maintenance is a reasonably predictable activity and it should be possible to pre-fund this spending with funds set aside now to meet future spending. Once this new tax increase goes through, it must be dedicated not to the city's general revenues but to an infrastructure maintenance fund and each year a portion of the additional tax revenue should also be set aside to build an infrastructure renewal endowment fund that would earn income to meet future needs in perpetuity. Such a pre-fund would reduce the need for future tax increases. In this manner, as the years go by, revenues for infrastructure maintenance will be in place in lock-step fashion as they are needed according to the asset management plan. Sound management of the funds raised needs to be demonstrated.</div>
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Third, councilors will need to show that they are committed to rein in other operating spending. Given the increase in water rates, user fees and hydro costs for homeowners, raising municipal taxes one and a half percent for infrastructure and then arguing that they also need another two to three percent increase for the operating budget while also maintaining the residential taxpayer needs to foot even more of the burden will demonstrate a disconnect with reality. Municipal councilors are part of the tier of government that is closest to voters. If they are not grounded in reality, then we truly are in trouble.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/health_care_costs_and_ontario_s_/"><b>Health Care Costs and Ontario's Deficit</b></a></div>
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<li class="li3">Nov 20, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/costs/"><span class="s2">costs</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s2">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+care/"><span class="s2">health care</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
</ul>
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The Ontario legislature reconvenes this week and it will be a wake-up call for the electorate as the government begins to deal with the deficit. Health and education together make up nearly 70 percent of provincial government spending in Ontario and apparently are going to be restricted to increases of three and one percent respectively (which means a lot of reductions for the remaining third of government spending). Of course, given inflation and population growth, real spending on health and education will also decline even with the allowed increases. </div>
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It might be instructive to take a look at exactly what increases in health care spending have been like in Ontario. Using the recently released National Health Expenditures 2011 by the Canadian Institute for Health Information, over the period 1999-2009, real per capita health spending in 1997 dollars in Ontario grew from 1,835 dollars to 2,558 dollars – an increase of 39 percent or almost 4 percent a year on average. With inflation of 2 percent and population growth of about one percent, a three percent increase in the health budget means a spending freeze in per capita terms. It means real per capita growth in health spending is about to go from 4 percent a year to zero.</div>
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Hospitals and physicians together now account for almost 60 percent of health spending. Given the size of the hospital and physician share and the recent increase in physician numbers, expect to have a lot of pressure applied to physicians and hospitals when it comes to cost control especially given that the government tackled the pharmacies last year. Between 1999 and 2009, real per capita provincial government spending on physicians grew at 36 percent and hospitals at 27 percent – below the increase for health as a whole. Where are the other culprits? Well, real per capita spending on drugs by the provincial government over this period grew 71 percent, public health measures grew 105 percent and capital spending grew 117 percent. A glance at the figures below shows the upsurge in real per capita spending that has occurred in these categories since the middle of the 1990s – at the end of the last period of restraint.</div>
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The provincial government will no doubt want innovative measures to rein in health care spending as articulated by their special advisor economist Don Drummond. In the 2011 Benefactors Lecture at the CD Howe Institute last week, Don Drummond warned against across the board health spending cuts or radical measures that would inflame the public and block reforms. He argued for measures that would get you more ‘bang for the buck’. Among them (with my interpretation in brackets): reallocations towards health promotion (i.e, more spending on public health); better patient centered and information driven care (i.e, patients doing more for themselves); recalibrated reimbursement for hospitals, physicians and drugs (i.e, renegotiated fee schedules especially for the doctors and salary restraint for health care workers); widening the scope for private provision (i.e, more private care) and more intense focus on the minority of patients who trigger the bulk of health care costs (i.e, end of life care is very expensive). </div>
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Given the size of Ontario's deficit gap, the health care sector will not remain untouched. Whether the public will be inflamed by these types of measures remains to be seen. Tackling the cost of end of life care will require a brave government indeed. With the dynamic of a minority government, it is going to be a very interesting new parliamentary session at Queen’s Park.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL1f4dZ3Pm8GqDZ3_b5WqyF-y1_t_99I89NQTQ0u1iG2IcmQIwbwcc9F8fplV6fC5ZpqE48BM3jRkLyTTxaHfHhWEU18Q30148gm_kvVcdYuMyiT2bOl3ZdUdfmA9xeYogGZ_p5tFGi2VA/s1600/preview_slide1-128.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhL1f4dZ3Pm8GqDZ3_b5WqyF-y1_t_99I89NQTQ0u1iG2IcmQIwbwcc9F8fplV6fC5ZpqE48BM3jRkLyTTxaHfHhWEU18Q30148gm_kvVcdYuMyiT2bOl3ZdUdfmA9xeYogGZ_p5tFGi2VA/s640/preview_slide1-128.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHlSMZVu8JxpGthwgzDNtpL7GCSHV0b7bpOUS0RDGQdkNjbBZjCh_ozjanxHZKfFgb71FnUKsdjmlfkuaxz7DfNz-KzEZiLCAwV-Vp_KNIXjtbiE2I1qQ9gkcLVB-SCxU4wY7EfhxDa-Wc/s1600/preview_slide1-129.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHlSMZVu8JxpGthwgzDNtpL7GCSHV0b7bpOUS0RDGQdkNjbBZjCh_ozjanxHZKfFgb71FnUKsdjmlfkuaxz7DfNz-KzEZiLCAwV-Vp_KNIXjtbiE2I1qQ9gkcLVB-SCxU4wY7EfhxDa-Wc/s640/preview_slide1-129.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbGDl0L88suWNGF4QcJqwzoZKRhEHyebWyYR0mvDLPt0zIGXmZvjAd8Vv3RHgAkhw3o9DDn5z-sz4E0CuoyRZkZV32uBUg1iCWBeIlMiCuE9_dadzfu9V6Ld4DBtKzUHD9C-Nntm8zNAQZ/s1600/preview_slide1-131.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbGDl0L88suWNGF4QcJqwzoZKRhEHyebWyYR0mvDLPt0zIGXmZvjAd8Vv3RHgAkhw3o9DDn5z-sz4E0CuoyRZkZV32uBUg1iCWBeIlMiCuE9_dadzfu9V6Ld4DBtKzUHD9C-Nntm8zNAQZ/s640/preview_slide1-131.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/government_subsidies_and_economi/"><b>Government Subsidies and Economic Development: Is the End Near for the Northern Ontario Heritage Fund?</b></a></div>
<ul class="ul1">
<li class="li3">Nov 19, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/eodf/"><span class="s2">eodf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/grants/"><span class="s2">grants</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/heritage+fund/"><span class="s2">heritage fund</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/subsidies/"><span class="s2">subsidies</span></a></li>
</ul>
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In the art of politics, timing is everything. My curiosity was certainly piqued earlier in the week when a story in the Ottawa Citizen reported that Ontario’s premier Dalton McGuinty was hinting that he was ready for a major policy reversal regarding the practice of provincial government grants and subsidies for business. According to the story, he was listening “to all the arguments” on these grants which have been referred to as corporate welfare. </div>
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In many respects, this would be a remarkable turn around given the Ontario Liberals campaigned on the strength of their economic strategy - a strategy of government investment in green energy in particular as a job creation program. There have been enormous subsidies to producers of wind and solar energy in the form of generous prices for the electricity generated. As well, there is the money in the regional development funds such as the Eastern Ontario Development Fund and the Northern Ontario Heritage Fund.</div>
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Why the sudden shift? It turns out the <a href="http://www.ottawacitizen.com/news/McGuinty+hints+that+open+ending+corporate+welfare/5716395/story.html"><span class="s2">Ottawa Citizen</span></a> has apparently been investigating stories that the Eastern Ontario Development Fund has been favouring businesses in Liberal ridings since the fund was established. Add to this Friday’s news that wood products company <a href="http://www.tbnewswatch.com/news/Default.aspx?cid=174660&catid=1"><span class="s2">Global Sticks in Thunder Bay</span></a> – a recipient of about seven million dollars in provincial funding – may be in some financial difficulty given that the most recent pay to employees has not been deposited and the plant seems to be quiet. Global Sticks was supposed to create up to 130 permanent jobs when announced in May 2011, which amounts to about 54,000 dollars in government subsidy per job created – assuming that 130 jobs were actually created. The cost per job to the government could indeed be much higher if fewer jobs were created. </div>
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All of this news places the future of the Northern Ontario Heritage Fund in some danger. The Northern Ontario Heritage Fund was created in the 1980s as one of the planks of a northern Ontario policy by the Peterson government. It was in part intended to address the decades of resource rent outflows from the north that had they been retained might have been useful in northern development. At one point in the first half of the twentieth century, revenues from timber and mining taxes were providing the government of Ontario with about 20 percent of its revenues – the equivalent of oil for Alberta today. These all flowed into general revenues. Ideally, the Heritage Fund should have been an endowment with the income generated providing funds for public infrastructure, culture and education projects in the north. Instead, it is an annual expenditure of the government and can be terminated at any time. The provincial government, given its deficit and the political damage caused by the Eastern Ontario Development Fund now has an incentive to reconsider the Northern Heritage Fund also. After all, once one such fund gets created, everyone wants one and then they become expensive to run. The price may suddenly have become too high.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/income_comparisons__northern_cen/"><b>Income Comparisons: Northern Centres & Ontario</b></a></div>
<ul class="ul1">
<li class="li3">Nov 18, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/comparisons/"><span class="s2">comparisons</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/income/"><span class="s2">income</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s2">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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In my November 15<span class="s3"><sup>th</sup></span> post, I used Statistics Canada tax filer annual data for the 2000 to 2009 period obtained from the Canada Customs and Revenue Agency to examine recent income trends in Thunder Bay. That same data source is also useful in doing some basic income comparisons of northern Ontario’s major population centers with themselves and Ontario as a whole. The first figure plots median total income for Thunder Bay, Greater Sudbury and Ontario as a whole. Being the median means that half of tax filers have incomes above the median figure and half are below.</div>
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Figure 1 shows growth in income for all three series but growth has been most pronounced in Greater Sudbury relative to Thunder Bay and Ontario. Between 2000 and 2009, median total income grew 42 percent in Sudbury, 29 percent in Thunder Bay and only 22 percent in Ontario as a whole. Despite the forest sector crisis in the north, it would appear that these two northern urban centers did better than Ontario as a whole when it came to income growth. Part of the reason is undoubtedly that they are regional centers with a strong cluster of government, education and health services. As well, the mining sector has been particularly robust, which has been a major benefit to the Sudbury area.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUERSY0HMJkeOGyd_461eQoZ5_A6d4UTibqAkcmrbc1l6C44d1D7Nj2falPevPwXvcCzFHdmkH7qZQDFSEd5DAajueOsBgUr-aZA3QsKXFXhHBtIUmG8AB7wBNiRkPhGOv1LFVMZFehY0u/s1600/slide1-126.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUERSY0HMJkeOGyd_461eQoZ5_A6d4UTibqAkcmrbc1l6C44d1D7Nj2falPevPwXvcCzFHdmkH7qZQDFSEd5DAajueOsBgUr-aZA3QsKXFXhHBtIUmG8AB7wBNiRkPhGOv1LFVMZFehY0u/s640/slide1-126.jpg" width="640" /></a></div>
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What is also interesting is the distribution of those tax filers across income categories. Over time, there has been an increase in the proportion of tax filers reporting more than 50,000 dollars in total income as well as more than 100,000 dollars (Figure 2). In Ontario as a whole, the percent of tax filers reporting more than 50,000 dollars grew from 19 percent in 2000 to 27 percent by 2009. Growth was even more pronounced in Sudbury going from 18 to 29 percent. The proportion of tax filers earning over 50,000 dollars a year was the lowest in Thunder Bay. As for those earning more than 100,000 dollars, the percent was generally greatest in Ontario as a whole compared to Thunder Bay and Sudbury except for a brief spurt in 2007 and 2008 for Sudbury, which saw an increase that surpassed Ontario and Thunder Bay.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5BlwD3emdlsPnoACoK0m5zOnhu2-AsWnOjHjCsY4vT4cecfaffDzYeAQSCVHgaw5mruobRulUhBwINPRsfKnNq_erp_FL9qGvMtLKPOSAhsUJBmZaiRABBcCWALOwCQOgxj_PX9i6h5y1/s1600/slide1-127.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5BlwD3emdlsPnoACoK0m5zOnhu2-AsWnOjHjCsY4vT4cecfaffDzYeAQSCVHgaw5mruobRulUhBwINPRsfKnNq_erp_FL9qGvMtLKPOSAhsUJBmZaiRABBcCWALOwCQOgxj_PX9i6h5y1/s640/slide1-127.jpg" width="640" /></a></div>
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These numbers provide some interesting observations on the economy in northern Ontario, at least as defined by its two largest urban centers. Relative to the province as a whole, median income is generally higher in Thunder Bay and Sudbury though the proportion of very high-income earners is lower. Sudbury has had a more robust economy than Thunder Bay as indicated by its more pronounced growth both in median total income as well as in its percentage of higher income earners. While the economy of northern Ontario has taken a battering over the last decade particularly in the forest sector, its two largest cities have been islands of relative prosperity even when compared to the province as a whole.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/calculating_the_impact_of_the_hs/"><b>Calculating the Impact of the HST Reduction</b></a></div>
<ul class="ul1">
<li class="li3">Nov 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/heating+costs/"><span class="s2">heating costs</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hst/"><span class="s2">hst</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/politics/"><span class="s2">politics</span></a></li>
</ul>
<div class="p4">
The Ontario provincial New Democrats and Conservatives in Ontario’s minority parliament have stated that they will introduce a private member’s bill to take the provincial portion of the HST off home heating charges. This would result in an 8 percent reduction on the cost of heating which the Finance minister Dwight Duncan has argued will result in a revenue reduction of 350 million dollars. </div>
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Based on the distribution of heating expenditures (electricity and natural gas) in Ontario by income quintile according to the Statistics Canada 2009 Survey of Household Spending presented by my colleague at <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/11/hst.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a>, the share of these foregone revenues that will go to the top twenty percent of income earners is more than three times the share that will go to low income households. In essence, high- income households will get more because they spend more.</div>
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So why are the Conservatives and more to the point the NDP supporting what seems like a redistribution to higher incomes? Well, I think it comes down to two reasons - both political. The first is both parties made reducing the HST part of their campaign platforms and are now following through because it is the nature of the political game to oppose the government. The second reason is that while more of the total savings from the reduction will go to the upper incomes, as a share of income it is relatively more important for the lower incomes.</div>
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Table 1 reproduces the table generated by my Worthwhile Canadian Initiative Colleague. It shows the lowest quintile accounting for about 10 percent of total heating expenditure in Ontario households while the top quintile accounts for about 31 percent of the spending. If these percentages are applied to the projected 350 million dollars in savings and used to generate HST Reduction Savings (see Table 2) one gets savings of 36 .1 million dollars going to the lowest quintile and 107.45 million dollars going to the top quintile. Based on the 2006 census, there were 4,555,025 private households in Ontario, which works out to 911,005 households per quintile. This allows us to estimate in Table 2 the average savings from the HST reduction per household. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq-0rpf3X5O2hZwA7WCFFHVJrj5um5IgsvgEnab1_q3Fu-InJXWeJeLyh03Weurrxzk7Mgc7X_aeY9uIejJJLIF3Hp4jbatH7z3AxTmx4hKdqKDJplgAXYlo8R_RZn6oIpXjBEBYdpfZhA/s1600/preview_slide1-124.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq-0rpf3X5O2hZwA7WCFFHVJrj5um5IgsvgEnab1_q3Fu-InJXWeJeLyh03Weurrxzk7Mgc7X_aeY9uIejJJLIF3Hp4jbatH7z3AxTmx4hKdqKDJplgAXYlo8R_RZn6oIpXjBEBYdpfZhA/s640/preview_slide1-124.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNhPI2t8pbFPa_LQyXPBifJuiAemEbTo8_Om7ePLydX3pHFw-fY77yA-omN4GKkWC3EFVyyr-wx1n7k1LwFTmvSLBblSTyItz7X3XPQo-j-pk734_ulj0KrJhr2rsmoAL2lakealu3OkN/s1600/preview_slide1-125.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNhPI2t8pbFPa_LQyXPBifJuiAemEbTo8_Om7ePLydX3pHFw-fY77yA-omN4GKkWC3EFVyyr-wx1n7k1LwFTmvSLBblSTyItz7X3XPQo-j-pk734_ulj0KrJhr2rsmoAL2lakealu3OkN/s640/preview_slide1-125.jpg" width="640" /></a></div>
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The results based on my calculations show that the savings would be on average $39.63 for the bottom quintile and $117.95 for the top quintile. Obviously, the average high-income household gets more money. However, low-income households spend more on necessities than high-income households and heating is a necessity. Lower income households in a sense are more sensitive to the cost of heating even if the dollar amounts of their savings are smaller. Put another way, 40 dollars to a low-income household earning 20,000 dollars a year is more significant than 118 dollars going to a household earning 188,000 dollars a year. If you take the average savings per household and divide by income for each quintile and then multiply by 100, it turns out that the savings for all the quintiles represent less than 1 percent of average income. However, the ratio for the lowest quintile is about three times that of the highest. In relative terms the savings are more important for lower incomes than higher incomes. Even with rebates designed to mitigate their regressive nature, consumption taxes can also be more of a burden for lower incomes because of cash flow issues – they are out the money when they purchase goods and have to wait months for a rebate. That wait is more of an issue if you are earning 20,000 dollars a year as opposed to 100,000 dollars.</div>
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Why is this seen as good politics? It seems like a win-win situation. By advocating for a policy that in relative terms benefits the lower income groups, the opposition can claim that they are fighting for the interests of lower income groups and advancing an inequality fighting agenda against regressive consumption taxation. At the same time, the larger dollar amounts in absolute terms accrue to the higher incomes. While inequality agendas are directed to towards the lower incomes, they are usually less likely to vote. It is higher income individuals that are more likely to vote and the larger dollar amounts are probably viewed as a more effective way to gain their attention. Basically, if you are going to bribe taxpayers, the higher income earners are going to be more costly.</div>
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I guess I’m shocked that the Ontario’s opposition parties seem to think that a household earning 188,000 dollars a year can be bribed with only about 100 bucks. The governing Liberals promised a Healthy Home Renovation tax credit that would cover up to 15 percent of the annual cost of improvements to allow seniors to live longer in their own homes – to a yearly maximum of $1,500 dollars. Given the high propensity of seniors to vote, it seems like a more effective vote targeting mechanism. But then, I suppose that is why they are the government and the other parties are not.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_trends__income_growt/"><b>Thunder Bay Trends: Income Growth During the “Lost Decade”</b></a></div>
<ul class="ul1">
<li class="li3">Nov 15, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/income+growth/"><span class="s2">income growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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The first decade of the 21<span class="s3"><sup>st</sup></span> century in Thunder Bay has seen the loss of employment due to the ravages of the forest sector crisis. Yet, despite these large losses in employment there has been a remarkably robust housing market, retail expansion and substantial private and public sector construction activity. Some additional evidence that the last decade has been one of economic surprises emerges from an examination of Statistics Canada data obtained from Canada Customs and Revenue Agency tax filer data for all persons who completed a T1 tax return or received a Canada Child Tax Benefit. This is annual data for the period 2000 to 2009.</div>
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Keep in mind that between 2000 and 2009, average monthly employment in Thunder Bay fell by almost ten per cent as thousands of jobs were lost in the city’s pulp and forest products sector. Yet, the tax filer data shows an increase in the number of tax filers between 2000 and 2009 of about 4.5 percent. The number of filers rose between 2000 and 2003, declined from 2003 to 2005 but then began to grow. Between 2000 and 2009, there was also an increase in the median total income reported by these tax filers of almost 29 percent – from $24,100 to $31,010.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYtL-XKD41hFwOPL5ch4rLB-UdXOjIIMMK1auUTrpjpTkdVS8AEcc4paoVXmB1WMV3FpEPtt2tm5q43WpduhNxM_hrCCgGTx7MKXyegzm8U8cp_uBv0Cp_QgKTuloMXOlunpj__IyeONSK/s1600/slide1-122.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYtL-XKD41hFwOPL5ch4rLB-UdXOjIIMMK1auUTrpjpTkdVS8AEcc4paoVXmB1WMV3FpEPtt2tm5q43WpduhNxM_hrCCgGTx7MKXyegzm8U8cp_uBv0Cp_QgKTuloMXOlunpj__IyeONSK/s640/slide1-122.jpg" width="640" /></a></div>
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Moreover, over these nine years, this median total income in Thunder Bay was about ten percent higher than for Canada. Finally, there was more than a doubling in the percentage of tax filers reporting a total income of more than $75,000- from 4 to 11 percent. Despite some serious blows, Thunder Bay’s economy has been relatively resilient and its income has expanded during a decade where employment has contracted. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjg5cz7VaiAlz_3UwXGoSJRs_LTBcZIvXFF_P_MXCuzOZSE0U4GhbCxuKmbb9qgdH4xQPvJ4-ppfySa83QrFq5ssztdlX1TrnI9ZqD91KBnlDPE9eJcIsvgla7XIlGnd-iNAmT9SmmppQvI/s1600/slide1-123.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjg5cz7VaiAlz_3UwXGoSJRs_LTBcZIvXFF_P_MXCuzOZSE0U4GhbCxuKmbb9qgdH4xQPvJ4-ppfySa83QrFq5ssztdlX1TrnI9ZqD91KBnlDPE9eJcIsvgla7XIlGnd-iNAmT9SmmppQvI/s640/slide1-123.jpg" width="640" /></a></div>
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Statistics Canada Data Series: V1694371, v16943714, v16943718.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/physician_numbers_and_health_car/"><b>Physician Numbers and Health Care Costs In Ontario</b></a></div>
<ul class="ul1">
<li class="li3">Nov 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+care+costs/"><span class="s2">health care costs</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/physicians/"><span class="s2">physicians</span></a></li>
</ul>
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With the current preoccupation with balancing Ontario’s provincial government budget, attention will invariably turn to health care costs and in particular the contribution of physicians to those costs. Data from the most recent releases of the Canadian Institute for Health Information are particularly instructive. Between 1975 and 2009, spending on physicians under the provincial government public sector health plan has grown from 0.7 to 10.7 billion dollars while total provincial government health spending has grown from 3.1 to 45.6 billion dollars. As a share of total provincial government health spending, the share devoted to physicians has grown slightly (See Figure 1) while that for hospitals has declined dramatically. While there has been a physician shortage in Ontario in the past, recent years have seen increases in the number of physicians (See Figure 2) – both specialists and family physicians. The stability of the physician expenditure share over time, combined with their recent increase in numbers suggests that physicians may be a target for health cost control on the near future.</div>
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However, looking at only the total number of physicians is simplistic and their numbers needs to be taken in context to their relative supply. While the total number of physicians has grown since the mid 1990s, so has Ontario’s population. When the number of physicians per 10,000 population is examined (See Figure 3), the results show that the number of specialists has managed to keep pace with population growth since the early 1990s but that is all. There has been no recent growth in the number of specialists per 10,000 population – unlike the 1980s when there was an increase. As for family physicians, their number per 10,000 population has declined since the early 1990s and they are still well below their peak. This of course explains why many Ontarians are still without a family physician despite the recent increases in the number of physicians. Over the last fifteen years, physician numbers per 10,000 population have barely matched Ontario’s population growth in the case of specialists and have declined in the case of family physicians. This means that access to physician services is still an issue for many Ontarians suggesting that the government will need to tread carefully with its cost control measures to avoid reducing access.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/dealing_with_ontario%E2%80%99s_fiscal_/"><b>Dealing with Ontario’s Fiscal Restraint</b></a></div>
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<li class="li3">Nov 13, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s2">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/government/"><span class="s2">government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/structural+redesign/"><span class="s2">structural redesign</span></a></li>
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Last week’s provincial cabinet meeting apparently included a briefing by Don Drummond who was appointed last March to head a commission on the restructuring of government services in Ontario. Apparently, he informed the premier and the cabinet that for the government to balance its budget by its 2017-18 target date, it will need to keep overall expenditure growth to one percent a year which means some serious fiscal readjustment especially for sectors such as health and education. As a result, Queen’s Park wants to fundamentally re-invent the way that government works in order to make it more efficient.</div>
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Ontario’s fiscal situation is serious and it is important to stop adding on to a net debt, which is pushing the quarter trillion dollar mark. Yet, after an election where the public finances were all but ignored, the government suddenly seems very eager to argue that its deficit targets require more serious action. With expenditure growth of one percent a year, it would only require revenue growth of three percent a year for the budget to balance by 2017-18. This is actually a reasonable revenue target given that annual revenue has been growing at an average of 4.5 percent a year since 2000.</div>
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It appears that the provincial government is now going to use the provincial deficit as a rationale to try to engage in another round of political and social experimentation that will be termed reinventing government. Rather than balancing the budget through traditional expenditure restraint and revenue enhancement, it is opting for structural redesign of institutions like health and education.</div>
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If you want a preview of what some of the initiatives for redesigning government might be, it might pay to visit the Mowat Institute – a policy institute set up with funding by the provincial government at University of Toronto – and download their report Shifting Gears: Paths of Fiscal Sustainability in Canada which was released in October 2010. The report argues that the path to sustainability is a “societal project that necessitates dialogue across the political spectrum”. That certainly will be the case with a minority government. Along with simply raising revenues or decreasing spending, there needs to be more innovative and transformative changes. In brief, the initiatives are:</div>
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• Transformative tax initiatives, such as harmonizing sales taxes.</div>
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• Transformative policy changes, such as raising the retirement age or requiring more years of service before public sector pensions can be collected.</div>
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• Expanding current program reviews and undertaking “whole of system” reviews that include other levels of government and that harmonise functions across governments.</div>
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• Applying a more rigorous fiscal lens to ordinary policy decisions that in the past were not thought of as fiscal items.</div>
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• Embracing the digitisation revolution which promises to radically transform how individuals access public services.</div>
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• Modernizing bureaucratic processes through consolidation and delegating to others those functions, which are not government’s core business of policy making, regulation and ensuring compliance.</div>
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• Adopting more service delivery models that rely less on direct delivery and more on new networks of government agencies, non-profit organizations, the private sector and individual citizens; improving governance, accountability and measurement of results in these areas will be crucial.</div>
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Given the size of anticipated savings, public appetite for change and institutional obstacles, the report concludes that the most likely avenues include:</div>
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<i>transforming the practices in their largest spending departments, such as Health; bringing down the cost of wages and benefits in the broad public sector; introducing transformative policy changes that affect retirement and pensions; modernizing bureaucratic processes; and digitisation that allows individuals to access their own services in ways of their own choosing, with less intermediation by public sector bureaucracies.</i> </div>
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While this is always room for innovation in service delivery, it is not entirely clear what these initiatives will translate into for the Ontario government. They suggest that public sector, health care and education sector labour and retirement costs will be a target and that there will be fewer government workers with more services provided electronically, though my experience with information technology is that it is not exactly cheap. It will all probably be creatively marketed as “citizen centered government services” and spawn a new Ministry of Transformative Government that will continually advertise the successes of this new age of government. </div>
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It always makes one a bit nervous when grand transformative initiatives and revolutionary paradigms are advanced in place of the nuts and bolts work needed to balance budgets. We can only hope the provincial government will be more successful in this new mission than it has been with its re-invention of the energy sector, where innovative new green energy sources have resulted in much more expensive electricity or its reinvention of health information services via the E-Health initiative. The real question is as follows: If the government is successful in fostering cost savings through transformative innovation of government services, will some of the savings be passed onto the citizens or simply be used to fund new government initiatives?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_chroni/"><b>Northern Economist in the Chronicle Journal</b></a></div>
<ul class="ul1">
<li class="li3">Nov 13, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/chronicle+journal/"><span class="s2">chronicle journal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s2">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/far+north+act/"><span class="s2">far north act</span></a></li>
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<b>The Far North Act: A Counterfactual</b></div>
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Originally appeared in The Chronicle-Journal, Thunder Bay, Ontario</div>
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Saturday, November 12, 2011</div>
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COMMENTARY<br />
By Livio Di Matteo</div>
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One of the analytical tools used in economic history to assess the impact of an economic event is the counterfactual. How different might the world be if an event had not occurred, and instead, an alternate economic reality occurred? The comparison is between the world today and the world as it might be.<br />
I ask this question in the context of the Far North Act because of its potential impact on the future economic development of Ontario’s North and particularly the economic opportunities for the First Nations in the Far North.<br />
While put forward as a process for community-based land use planning and development, the Far North Act is also setting aside from development an interconnected area of conservation lands of at least 225,000 square kilometres — an area that is about 20 per cent of the landmass of Ontario. To put it into context, it is an area about twice the size of southern Ontario — which represents only about 10 per cent of Ontario’s land mass.<br />
The Far North is vast and potentially rich in economic resources. Its exploitation could serve as a source of economic development for a region that has been chronically depressed over the last few decades. While one might argue that the North is so vast that 20 per cent of its land is not really a significant amount, the fact is we do not know if the most valuable or least valuable parts of the region in terms of resource potential will be sequestered.<br />
To frame a counterfactual, how would the economic and indeed political history of Ontario and Canada be different if in 1774, with the passage of the Quebec Act, the British government had decided to set aside the lands of the area west of the Ottawa River, north of lakes Erie and Ontario, and south of the French River as a wilderness preserve in order to safeguard its natural heritage for future generations? Suppose Sir Guy Carleton and the British government had decided that this land was to remain free from agricultural settlers and development and serve as a vast nature preserve for future generations of the Empire.<br />
Think of the implications. With the American Revolution, the United Empire Loyalists might not have settled in Ontario. There would have been no timber trade and no agricultural settlement, no Ontario wheat economy and no urban development. There would be no Toronto, Guelph, London, Kitchener or Hamilton or a host of other cities.<br />
Future development would have bypassed the region entirely and occurred either to the north of it or even further west if at all.<br />
Another possibility. During the War of 1812, the empty region could easily have been invaded, occupied and then developed by the Americans. Indeed, American history during the nineteenth century was one of expansionism and an empty region to its north would have been a likely target for annexation. There would likely not be a Canada, as we know it.<br />
Think of all the millions of people currently living in southern Ontario, the cities, the dense urban development and think of it now as pristine wilderness forever preserving majestic stands of deciduous forest and white pine. Or, think of it as another rust-belt state in the U.S. Midwest.<br />
Far fetched you might say? Not applicable given the differences in the expectations and standards of yesterday compared to today? Perhaps. Yet, think of it as simply an example of how history might have been different if a “Far West Act” had been passed for Britain’s Quebec colony. Then think of how the future of Northern Ontario’s economy might be affected by developments that we cannot presently imagine as a result of the Far North Act.</div>
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This is not to say that we should not preserve a large chunk of the natural heritage of the North for future generations. After all, think of what has been lost of southern Ontario’s rich natural heritage due to unhindered urban sprawl and development.<br />
Yet, we must also think carefully about how future generations in the North are to earn a living. How will we be certain that the 225,000 square kilometres being set aside does not contain another nickel deposit the size of Sudbury’s or even vaster amounts of gold, iron ore, palladium or some other resource? What if a valuable resource is discovered on land after it has been designated as protected? What if First Nations decide to harvest timber on what they see as their traditional land but which the government has designated as protected? Then what? Exactly what kind of decision making and consultation mechanism with First Nations did the government have in mind when it passed the Act?<br />
The North is land- and resource-intensive. That is its comparative advantage and it risks being hampered by such far-reaching legislation. Along with protected areas, failure to agree upon a land use plan means that development could be frozen for decades. Indeed, the uncertainty regarding what land is going to be off limits may discourage business investment. If similar legislation had been passed early on in the history of southern Ontario, Ontario’s future economic greatness might never have come to pass. Why should the opportunity for future growth be limited for Ontario’s North?<br />
While land should be set aside for environmental protection purposes, there needs to be flexibility to ensure that economically beneficial resource development can occur and that the development is done in an environmentally responsible manner. This is not saying we should repeal the Far North Act. However, we need to ensure as the Far North Act is implemented, that sufficient consultation with affected communities occurs and that care is taken when categories of protected lands are designated so as to not hinder the economic development of the North and its First Nations. It is not enough for the provincial government to assume the Far North Act has been misunderstood and needs to be better explained. The provincial government actually needs to listen.</div>
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Livio Di Matteo is professor of economics at Lakehead University. Visit his Northern Economist Blog at <a href="http://ldimatte.shawwebspace.ca/"><span class="s2">http://ldimatte.shawwebspace.ca/</span></a>.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/le_plan_nord__un_plan_pas_comme_/"><b>Le Plan Nord: Un Plan Pas Comme L'Autre</b></a></div>
<ul class="ul1">
<li class="li11"><span class="s4">Nov 10, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s2">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/differences/"><span class="s2">differences</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+growth+plan/"><span class="s2">northern growth plan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/plan+nord/"><span class="s2">plan nord</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/quebec/"><span class="s2">quebec</span></a></span></li>
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On my recent trip to Montreal, I picked up the November 2nd issue of La Presse and was amazed to find a twelve page insert dealing with stories and advertising on Quebec's Plan Nord. To put it in perspective, it would be like the Toronto Star deciding to devote a block of pages to the Northern Ontario Growth Plan. Needless to say, the difference between the level of engagement in Quebec with its northern development compared with Ontario is astounding. When push comes to shove, Le Plan Nord is being sold as an investment frontier with implications for Quebec's economic future. The Northern Growth Plan in Ontario is really something that has only caught the attention of those of us in northern Ontario and even we don't really know what it means because nothing has been fleshed out.</div>
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Le Plan Nord is looking at 33 billion dollars in investment in Quebec's North - the area north of the 49th parallel - over the next 25 years to develop hydroelectric and mining resources. This is an area that constitutes 1.2 million square kilometers or 72 percent of Quebec's land mass and that has a current population of about 120,000. Mining investment in Quebec's north is currently looking at 11 projects, for a total investment of 20 billion dollars and apparently create 11,000 construction jobs and 4,000 additional mining and processing jobs. In total, about 20,000 jobs are expected to be created by all of the development. The plan is also about conservation. Along with the development, there will be land set aside for conservation purposes. </div>
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Unlike Ontario, where the Northern Growth Plan seems to have been decoupled from the Far North Act, in Quebec, development and conservation have been integrated - at least for the purposes of the initial plan. The conservation goal is quite ambitious - the aim is to have 12 percent of the land in their far north set aside from industrial and commercial development by 2015 with up to 50 percent - some 600,000 square kilometers - set aside by 2035. The comment has been made that this might be too ambitious. Our Far North Act actually sets aside a smaller amount of land but has generated more controversy within the region. I think part of this is because the Ontario government's lower key and lack of detail approach seems to be signalling that it is more interested in environmental concerns rather than actual northern economic development. The Quebec government on the other hand is asserting it wants conservation as well as development, has both in the same plan, and is enthusiastic about development in the north.</div>
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However, there is not unanimous support within Quebec's First Nations for the Plan Nord. It has been expressed that the consultation process does not sufficiently represent all the First Nation communities affected. Nevertheless, the Cree First Nation's Chief Matthew Coon Come in the La Presse insert took out a full page ad and stated that "je suis heureux de déclarer, au nom de la Nation crie, que j'appuie et que j'approve le Plan nord." In particular, Grand Chief Coon Come expresses support for the economic growth opportunities that the plan is expected to bring.</div>
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Le Plan Nord is not perfect and not everything that is planned will come to pass. Nevertheless, it serves as an interesting comparison between the way in which northern development is being articulated and debated in Quebec - especially in its major urban center - and the way it is being largely neglected in Ontario outside of the north. Given Ontario's weak economic performance over the last few years, one might think that there would be more excitement about a northern investment frontier that would create jobs, boost incomes and government revenues and help propel the Ontario economy to renewed prosperity. Obviously, we need to think again.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/dealing_with_the_world_economic_/"><b>Dealing with the World Economic Crisis</b></a></div>
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<li class="li3">Nov 9, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/aggregate+demand/"><span class="s2">aggregate demand</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/china/"><span class="s2">china</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/crisis/"><span class="s2">crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/imf/"><span class="s2">imf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/world+economy/"><span class="s2">world economy</span></a></li>
</ul>
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Christine Lagarde, the head of the International Monetary Fund is in China today and warned that the global economy faces worsening financial stability and a collapse in aggregate demand that could result in a lost decade. Until recently, the "lost decade" often referred to the Great Depression of the 1930s. The use of such terminology at present is an indicator of just how serious matters are. Why is the head of the IMF in China? China is a rising economic power and may be best placed to help out in a role formerly played by the United States - a role I would term as "global spender of last resort". The American consumer was a major player in driving the world's export markets but with the massive wealth effects of the housing market collapse and the domestic debt crisis, is no longer able to backstop the world economy with its free spending ways. China has certainly been playing a more important role via its activity in international sovereign debt markets but whether it is willing or able to buttress world aggregate demand is another question. While the Chinese economy is large, its per capita income is still quite low.</div>
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I would suggest that on the financial side, there is a need for a global lender of last resort to stabilize financial markets, sovereign debt, and currencies and reduce the uncertainty of the current piecemeal approach to crisis management. How this might be accomplished is beyond me. On the commodity side, there is a need for a global spender of last resort to buttress the demand side and reduce the risk of secular stagnation. As mentioned, that used to be the American economy and its consumers. I’m not certain I see a replacement for the American role anywhere on the horizon. </div>
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Ultimately, I think the difficulties of resolving the current world economic crisis also come down to a lack of political and economic institutions to deal with a more connected global economy. When push comes to shove, the international efforts of summits and meetings to deal with the crisis of interconnected global financial and commodity markets seem more akin to the diplomacy of the slower moving 19<span class="s3"><sup>th</sup></span> century than the world of the 21<span class="s3"><sup>st</sup></span> century. International meetings with their stately photo ops and long drawn out negotiations often feel and look more like the Congress of Vienna (1815) rather than a reflection of the current world. The framework to deal with the complexity of the world economic system consists of short term crisis management housed in an international institutional structure last revised in the aftermath of the Second World War. Of course, what should replace it is a good question.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/recent_economic_indicators_for_o/"><b>Recent Economic Indicators for Ontario and the Northwest: A Brief Analysis</b></a></div>
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<li class="li11"><span class="s4">Nov 8, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/"><span class="s2">gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></span></li>
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There have been several releases of economic news over the last few days, which suggest that the Ontario economy is not doing particularly well. First, there was the Statistics Canada release of employment numbers for October that show that employment fell in Ontario in October with a decline of 39,000 jobs driving the unemployment rate upwards by 0.5 percentage points to 8.1 percent. Today, Statistics Canada released the Provincial and Territorial economic accounts, which show that in 2010 Ontario’s economy rebounded with 3 percent growth in GDP. Nevertheless, this was below the Canadian increase of 3.2 percent. Moreover, given that the contraction for the Ontario economy was -3.2 percent in 2009, it means that Ontario’s economy has not really grown in two years. In politics, timing is everything and it would have been interesting to see what impact the release of these numbers would have had on the outcome of the Ontario election if they had been available a month earlier.</div>
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An examination of the employment numbers for Ontario regions show that October saw employment declines in seven of the eleven economic regions with Kitchener-Waterloo-Barrie as the hardest hit in percentage terms. Other regions that were hit almost as hard were Ottawa, London, Northeastern Ontario and the Toronto-GTA area. What is particularly interesting is that there were small increases in Muskoka-Kawarthas, Hamilton-Niagara and Windsor-Sarnia and a fairly large rebound of 2 percent in employment in Northwestern Ontario. The rebound in Northwestern Ontario employment is even more pronounced if the October numbers are annualized as they show an increase in employment from October 2010 to 2011 of 6.4 percent. Yet, the unemployment rate in Thunder Bay apparently went up in October from 6.0 to 6.9 percent. </div>
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Employment in Thunder Bay between September and October 2011 also rose but the labour force expanded even faster. The labour force in Thunder Bay grew from 63,100 to 64,000 (an increase of 1.4 percent) while employment grew from 59,300 to 59,600 (only a 0.5 percent increase). The more rapid expansion of the labour force has pushed up the unemployment rate but that by itself is relatively good news. It means that the economy is perceived as buoyant enough to begin attracting entrants back into the labour force. However, much of this activity appears to have been fueled by road and construction work if observation from driving around Thunder Bay recently is any indication, which suggests it could be relatively short-lived given the approach of winter. As well, employment in Thunder Bay is still well below its March 2003 peak of 67,400 jobs. There is still a distance to go when it comes to economic recovery in the city and by extension the region.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaIrUNnTzqN6kXudkYtV-rsIyRE2rtcyo2F32uc305vDVm1xhbkI-SxI_3-MUTdmH5ECtqQJqex22kkND4k49bmUErhcyvE5BIdm8kTdNfOfYn6QLXEzvgM_q_0ElpJy5BM3RSwInP_gif/s1600/slide1-117.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjaIrUNnTzqN6kXudkYtV-rsIyRE2rtcyo2F32uc305vDVm1xhbkI-SxI_3-MUTdmH5ECtqQJqex22kkND4k49bmUErhcyvE5BIdm8kTdNfOfYn6QLXEzvgM_q_0ElpJy5BM3RSwInP_gif/s640/slide1-117.jpg" width="640" /></a></div>
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Statistics Canada Data Sources for Figure</div>
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v2539122, v2539155, v2539188, v2539221, v2539254, v2539287, v2539320, v2539353, v2539386, v2539419, v2539452, v2540574.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_financial_and_economic_crisi/"><b>The Financial and Economic Crisis: A Greek Maneuver?</b></a></div>
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<li class="li3">Nov 5, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/bailout/"><span class="s2">bailout</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt+crisis/"><span class="s2">debt crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/greece/"><span class="s2">greece</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/papandreou/"><span class="s2">papandreou</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/politics/"><span class="s2">politics</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/referendum/"><span class="s2">referendum</span></a></li>
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It has been a dizzying week around the world as fears of Greek debt default lead to yet another roller-coaster ride on world stock markets after Papandreou called for a domestic referendum on the European led rescue plan. In the end, the call for a referendum was withdrawn as Europe threatened to end the bailout support and questioned Greece’s membership in the European Union. Ultimately, Greek Prime Minister Papandreou won his non-confidence vote and will apparently appoint a coalition government to vote in and implement the latest bailout package. He has apparently even offered to step down.</div>
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Irresponsible short-term behavior on the part of Greece designed to evade responsibility for its financial mess or a calculated stratagem? What I think Papandreou accomplished was to use the major European countries as levers to actually try to implement the bailout package. After all, given the fragile political situation in Greece, trying to push through the bailout on his own would have been a political disaster. What politician facing a situation of confidence votes in a minority parliament wants to lead a charge for austerity that will inflame a public that has already been facing the pain of economic austerity and adjustment over the last year? Papandreou brought the matter to a head by proposing the referendum – one can imagine what the question on the ballot might have been – Yes or No – Do you want more tax hikes and cuts in government spending? The resulting economic turmoil on world markets forced the hand of the European Union to basically tie cash assistance to implementing the bailout package and even questioned Greece’s membership in the EU. </div>
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The result? With France, Germany and the EU now wielding a stick, Papandreou now was able to demonstrate to the public, his party and the opposition that it is the rest of the world that demands more sacrifice. It was a spreading of the blame and appears to have worked. There was a revolt in his party, uproar in Greece, economic drama around the world and having survived the confidence vote the bailout plan will now move towards implementation. I think Papandreou’s move has actually built support for the bailout package within Greece by forcing members of his party, the public and the opposition to take positions. This may have been a high-risk strategy to provide a base to build a coalition government. Will it cost him his job? Maybe. On the other hand, offering to resign in such a situation seems to also be a calculated challenge to opponents given the dire fiscal and economic situation. Want the job? Go ahead. Make my day. </div>
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I wonder what will happen in Italy this week?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/worker_absenteeism__the_uniquene/"><b>Worker Absenteeism: The Uniqueness of Thunder Bay</b></a></div>
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<li class="li6"><span class="s3">Nov 5, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/absenteeism/"><span class="s2">absenteeism</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/days+off/"><span class="s2">days off</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/workplace+safety/"><span class="s2">workplace safety</span></a></span></li>
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Several days ago, I posted on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/11/does-economic-growth-lower-workplace-absenteeism.html"><span class="s2">Worthwhile Canadian Initiative</span></a> regarding the relationship between days off from work and real GDP growth rates using Canadian data. I found that there seemed to be an inverse relationship with higher GDP growth rates being associated with lower numbers of days off from work. From the same Statistics Canada data source, I was also able to obtain some figures for Ontario and for Thunder Bay. The results are quite interesting.</div>
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While days off due to illness and disability in Ontario track Canada’s fairly closely, Thunder Bay is once again different from both the province and the nation. Full time workers in Thunder Bay seem to be more likely on average to be absent from work due to illness or disability. As the time series chart shows, with the exception of 1998 and 1987, total days lost per worker in Thunder Bay are almost always above the totals for Canada or Ontario. Over the period 1987 to 2010, total days lost per full time worker averaged nine for Canada, 8.5 for Ontario and 11 for Thunder Bay. When it came to days lost for illness or disability, the averages were 6.9 for Canada, 6.3 for Ontario and 8.7 for Thunder Bay. The averages for days lost due to personal or family reasons on the other hand are about 2 for Canada, Ontario and Thunder Bay, suggesting that illness and disability is the source of the difference.</div>
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So why is worker absenteeism more of problem in Thunder Bay? It is possible that the resource and transportation intensive nature of the regional economy creates a more hazardous job environment and more workers are injured or become ill on the job. There has certainly been evidence of this recently given some of the reported accidents in the construction and forest sector in the region. A complete assessment of that argument would of course require data for other resource intensive communities to see if similar patterns hold. Needless to say, knowing why workers in Thunder Bay are more likely to call in sick would be interesting information for social and labor groups in the community as well as potential investors and business people.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/justin_bieber_is_my_father_too/"><b>Justin Bieber is My Father Too!</b></a></div>
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<li class="li3">Nov 2, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/father/"><span class="s2">father</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/justin+bieber/"><span class="s2">justin bieber</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/rent-seeking/"><span class="s2">rent-seeking</span></a></li>
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Apparently, Canadian pop music sensation Justin Bieber may be facing a paternity suit in California. According to a report I saw in the <a href="http://www.montrealgazette.com/entertainment/Justin+Bieber+with+paternity+suit+Reports/5644255/story.html"><span class="s2">Montreal Gazette</span></a>, a 20-year old Californian claims that Mr. Bieber is the father of her three-month old baby - providing a new dimension to his song Baby - and that the tryst occurred backstage after a concert in October 2010. Needless to say, Mr. Bieber’s representatives have strenuously denied the claims. While one can suppose that anything is possible, in the absence of any proof the claim seems unlikely. What is going on here? It could be an effort to get attention. It could be a prank – the suit was filed on Halloween – or it could be …rent seeking behaviour.</div>
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Once upon a time, merchants and nobles would lobby their kings for exclusive trading monopolies on the sale of salt or oil or other special favours, which allowed them to capture economic benefits while contributing little if anything to economic productivity. This type of behaviour is known as rent seeking and in modern times often manifests itself via lobbying efforts that seek tariff protection or an expansion of copyright protection or other such exclusive privileges. </div>
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Modern celebrities and their wealth can also be the target of rent-seeking economic behaviour. A high profile performer such as Mr. Bieber can be a target for lawsuits designed to extract economic benefits. After all, if the suit is successful, along with child support there will likely be all sorts of payments for damages for personal trauma of one kind or another. Given his resources, he should be able to obtain excellent legal services and put an end to the lawsuit. After all, if one such suit is successful, it would provide an incentive for the world to suddenly be inundated with “Bieber’s children.” Many would have the incentive to say Justin Beiber is their father as outrageous as the claim might seem. Who’s to say that Justin Bieber is not my father too? With time travel, anything is possible. Never say Never!</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiizlFGH5Axb_lcqCrgtUKvYhp2WtNm1JYZh_ZGmvZGCxPg2HJXNX45EOUlBcz1a79wUyPf-mhY9p7KbBeGR5jOqd9fHW3BWi7CC2MMvWTLO1-o9npBcLD3eGB6N42ztwX0as_o3-MkbEM2/s1600/preview_slide1-115.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiizlFGH5Axb_lcqCrgtUKvYhp2WtNm1JYZh_ZGmvZGCxPg2HJXNX45EOUlBcz1a79wUyPf-mhY9p7KbBeGR5jOqd9fHW3BWi7CC2MMvWTLO1-o9npBcLD3eGB6N42ztwX0as_o3-MkbEM2/s640/preview_slide1-115.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_montreal/"><b>Northern Economist in Montreal</b></a></div>
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<li class="li6"><span class="s3">Nov 2, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/chsrf/"><span class="s2">chsrf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/conference/"><span class="s2">conference</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+expenditures/"><span class="s2">health expenditures</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/livio+di+matteo/"><span class="s2">livio di matteo</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/montreal/"><span class="s2">montreal</span></a></span></li>
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Quebec, like the rest of Canada, is facing rising public health expenditures. On November 3<span class="s4"><sup>rd</sup></span>, I will be participating in an event at the Mont Royal Centre in Montreal sponsored by the Institut du Nouveau Monde, CIRANO and the Canadian Health Services Research Foundation (CHSRF) titled <a href="http://www.sante-conference.ca/en/programmation/sustainability/#programmation"><span class="s2">“Health, Everyone’s Concern”. </span></a>The conference will inform Quebec society on the need to take action on fiscal equilibrium and health system sustainability as well as explore available options. The themes of the two day conference will include sessions on diagnostics and major issues in health, promotion of health and prevention of illness, the sustainability of public healthcare systems and, healthcare management and governance issues. My session on the morning of day two of the conference will be a panel on the sustainability of public health care systems. The moderator of my session will be Gillian Mulvale, Director Healthcare Financing, Innovation and Transformation of the CHSRF and my fellow panelists will be Claude Castonguay, Invited Fellow, CIRANO and former Quebec minister of Health and Social Affairs and Jeff Turnbull, Past President of the Canadian Medical Association. It should be an exciting and informative panel discussion.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj227qcIEPdh2-Vni7Qqt1lN_ECirCcBdkRkt0dMXGakvquvXUQkYJzJ-Fzw6Ow1Z9iP4Oxb5PERq_BS39-eDyHm1RPwg4kJKkyGf5JLcNfwJcACip72xLtzVzZKuImsdxikgT4ogqT0Av_/s1600/preview_slide1-114.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj227qcIEPdh2-Vni7Qqt1lN_ECirCcBdkRkt0dMXGakvquvXUQkYJzJ-Fzw6Ow1Z9iP4Oxb5PERq_BS39-eDyHm1RPwg4kJKkyGf5JLcNfwJcACip72xLtzVzZKuImsdxikgT4ogqT0Av_/s640/preview_slide1-114.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_far_north_act__economic_deve/"><b>The Far North Act, Economic Development and the Aboriginal Future</b></a></div>
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<li class="li3">Nov 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/far+north+act/"><span class="s2">far north act</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/first+nations/"><span class="s2">first nations</span></a></li>
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The aboriginal population of Northern Ontario is growing at a much faster rate than the non-aboriginal population and faces a number of economic and social challenges. Along with education and the acquisition of human capital, another source of future economic welfare improvement must be the employment opportunities associated with resource development in Ontario’s north. The Ring of Fire will likely be one such opportunity. However, the prospect of other future resource discoveries and associated economic development is now much diminished as a result of the Far North Act passed by the McGuinty Liberal government a year ago. This is unfortunate given the forecast increases in future demand for resources from the developing world - in particular, the Asia-Pacific region.</div>
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As a result of the Far North Act, some 225,000 square kilometers of Ontario’s far north will be off limits to resource development - an area that is roughly twenty percent of the province’s land mass. While this action has ostensibly been done with the aim of protecting a large chunk of Ontario’s environmental heritage, it has not been welcomed by northern Ontario’s First Nations. The Chiefs of the Nishnawbe Aski Nation headed by Grand Chief Stan Beardy unanimously opposed the Act, though in the aftermath of the October 6<span class="s4"><sup>th</sup></span> election <a href="http://www.chroniclejournal.com/content/news/local/2011/10/08/nan-eager-work-mpps"><span class="s2">have stated</span></a> they will continue to strive for a positive working relationship with the new provincial government. </div>
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The opposition Progressive Conservatives have announced they intend to fight to have the Far North legislation repealed. In a report in <a href="http://www.kenoradailyminerandnews.com/ArticleDisplay.aspx?e=3347479"><span class="s2">Kenora’s Daily Miner and News</span></a>, Minister of Natural Resources Michael Gravelle called the opposition's approach "not particularly helpful," saying his next move is to explain the importance of the act to Ontarians. "I think the opposition is displaying a significant and deliberate misunderstanding of the Far North Act itself," he said. "This is beneficial, allowing us to move forward on unprecedented land use plans with First Nations. For the very first time, the First Nations land use plans are embedded in law. This will, I believe, provide the clarity that industry needs in the Far North."</div>
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This is going to be a contentious issue though how much the provincial government is willing to backtrack on the legislation is open to debate. Given the messianic zeal with which the provincial Liberals have approached environmental and energy issues –even to the detriment of their electoral performance in this region – it is unlikely that they will retreat. Nevertheless, they may be open to modifications if not for the repeal of the legislation. For some additional discussion and analysis of this issue, you might want to visit <a href="http://www.republicofmining.com/2011/10/31/ontario-far-north-act-reducing-aboriginal-poverty-through-parks-or-mines-%e2%80%93-by-stan-sudol/"><span class="s2">Stan Sudol’s Republic of Mining</span></a> web site for this story.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-54170980659637769072016-12-14T15:38:00.002-08:002017-05-28T05:51:26.228-07:00October 2011 Posts<div class="p1">
<b>19 Posts from October 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/what_vision_for_universities/"><b>What Vision for Universities?</b></a></div>
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<li class="li3">Oct 28, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/research/"><span class="s2">research</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/teaching/"><span class="s2">teaching</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/universities/"><span class="s2">universities</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/vision/"><span class="s2">vision</span></a></li>
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My friend and PhD Thesis advisor Peter George was awarded the David C. Smith Award for Significant Contribution to Scholarship and Policy on Higher Education in Canada at a dinner on October 13<span class="s3"><sup>th</sup></span> hosted by the <a href="http://www.cou.on.ca/home.aspx"><span class="s2">Council of Ontario Universities</span></a>. As part of the celebration, Peter George delivered a <a href="http://www.cou.on.ca/about/chairs-and-awards/david-c--smith-award.aspx"><span class="s2">speech</span></a> that drew upon his three-term experience as President of McMaster to reflect and comment on the state and future of university education. He noted that during the recent provincial election in Ontario, he did not see a vision for higher education articulated by any of the parties and yet he believes that this is what is needed the most. </div>
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As he said: “This lack of a real strategic vision for higher education in Ontario is the BIGGEST elephant in this room for it is the one we are ALL riding.” While acknowledging the importance of increased participation and enrollment, among the things he would like to see in a vision for post secondary education include more emphasis on quality and less on accessibility and enrollment levels, more differentiation across universities, and the integration of research and educational priorities so that research spills over into the educational mission.</div>
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It is hard not to agree with these components of a vision for Ontario and indeed Canadian post-secondary education but I would like to add a few more points. If we are to have a new vision for post-secondary education, I think it is important that the vision also focus on what post-secondary education is about. I think universities have lost their way over the last few decades and the undergraduate experience diluted but not necessarily because university professors are too focused on their research or because universities are severely underfunded. </div>
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Universities should be about advanced research and teaching. They are places where our young – the future of our civilization – should come to learn and learn how to think and how to advance knowledge. Research and teaching are integrally linked – you cannot have good teaching without the depth of knowledge that research activity affords. Without research on the part of academics, teaching ultimately becomes recitation rather than active learning and knowledge generation. </div>
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As for the underfunding claim, per capita resources in the post-secondary sector have actually been rising over the last decade and at an impressive clip but the government contribution to basic operations has lagged. Much of the real resource growth has occurred because of increases in research funding as well as tuition increases. However, this resource increase has not been directed into improving the undergraduate experience because universities have lost their focus as places of advanced research and learning designed to build knowledge and learning. Indeed, students are actually paying for this lost focus via higher tuition that is going to fund a wide range of alternate priorities.</div>
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In their bid to attract limited government funding and curry favor with a public focused on the immediate, universities have allowed their core mission of research and teaching to become blurred. Universities are now expected to be businesses and generate revenue by fostering commercialization. Universities are expected to prepare students for the jobs of the present and the future by providing relevant skills and job training with knowledge deepening provided by liberal arts and science as an afterthought rather than a core component. Universities are expected to look current by embracing all the latest classroom technologies often at considerable expense without any real evidence as to their efficacy. </div>
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Universities are expected to promote accessibility by boosting enrollment. Universities are then also expected to increase student success by offering remedial help and augmented student assistance and support. Universities are expected to be regional economic drivers by strengthening their relationships with their regional communities and embracing their role as contributors to economic development. Universities are expected to promote, support and recognize research that addresses major community concerns as well as drive the frontiers of knowledge. </div>
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Universities are also expected to champion every leading cause that comes along and formally integrate it into the curriculum whether it be social justice, wealth inequality, an aging population, global warming, locally grown food, financial literacy or the hazards of reality television as well as develop clear policies to address any issues of oppression on campus. It is no longer enough to rely on the research interests of autonomous faculty and their research programs to do this – it must be planned, directed and coordinated with an ever expanding administrative apparatus. The best of intentions may be behind these moves to expand the undergraduate experience and many of them are indeed noble but there are simply far too many targets for universities to address and not enough instruments. </div>
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University is supposed to be a broadening experience for students by exposing them to different ideas and views and new knowledge. However, universities today seem to be afflicted with a massive case of attention deficit disorder as they try to be many things to many people. In the end, they risk not doing any of them particularly well and in the process damaging their core function of research and teaching on which the future transmission of our civilization rests. Is this to be our vision for universities in the 21<span class="s3"><sup>st</sup></span> century? Perhaps it is time for corrective lenses that allow for some focus.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/housing_affordability__thunder_b/"><b>Housing Affordability: Thunder Bay's Competitive Advantage</b></a></div>
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<li class="li7"><span class="s4">Oct 28, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/affordability/"><span class="s2">affordability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/competitive+advantage/"><span class="s2">competitive advantage</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing+prices/"><span class="s2">housing prices</span></a></span></li>
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The affordability of housing is a major contributor to the cost of living in major urban centers and ultimately the quality of life. Moreover, affordable housing can also be an important economic development tool given the international war for talent which seeks to attract mobile and skilled knowledge economy workers. According to the <a href="http://www.demographia.com/"><span class="s2">7th Annual Demographia International Housing Affordability Survey</span></a>, the rise in the price of housing has been financially damaging to households in major urban centers and housing markets of Australia, the UK, New Zealand as well as the United States and Canada with housing prices having doubled or tripled relative to income in some of these markets. This has been a factor in migration and population change. For example, for 500 metropolitan areas in the United states, between 2000 and 2009, the more unaffordable metropolitan areas lost 9.6 percent of their residents (4.7 million) by domestic migration to other areas, nearly 10 percent of their 2000 population. By contrast, the less expensive metropolitan areas gained 4.2 million domestic migrants (2.3 percent of their population).</div>
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In terms of affordability, the most expensive housing market in the world for metropolitan areas with a population greater than one million people was Hong Kong with a median house price to median income ratio of 11.4. The most affordable market in this category was Atlanta, Georgia at a ratio of 2.3. By way of comparison, Vancouver sat just a notch below Hong Kong with a ratio of 9.5 while Toronto was at 5.1.</div>
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An affordable housing market was defined as one with a median price to median income ratio of 3.0 or less and amongst these cities, Thunder Bay was ranked as extremely affordable with a ratio of 2.3. In terms of housing affordability, Thunder Bay is in the same league as Fredericton, New Brunswick Atlanta, Georgia; Duluth, Minnesota and Provo, Utah - all with scores of 2.3. Only Windsor, Ontario was more affordable than Thunder Bay with a ratio of 2.1. Thunder Bay had an international affordability rank of 22 with Saginaw Michigan at a rank of 1, Calgary Alberta at 200, Montreal at 257, Victoria BC at 309 and Hong Kong last at 325.</div>
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Now of course, this affordability also can be an indicator of a weak economy. After all, Fredericton, Thunder Bay and Windsor have not exactly been leading the country in terms of economic growth. At the same time, the affordability of housing can be an ingredient in strategies designed to attract professionals and businesses to set up shop. It can be a source of competitive advantage in the long run by allowing families to own their own home and have financial resources left over for activities that can boost the quality of life.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_sustainability_snapshot_for_on/"><b>A Sustainability Snapshot for Ontario Post-Secondary Education</b></a></div>
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<li class="li3">Oct 26, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/post-secondary/"><span class="s2">post-secondary</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sustainability/"><span class="s2">sustainability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/universities/"><span class="s2">universities</span></a></li>
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An examination of Statistics Canada data on post-secondary education for Ontario reveals some interesting trends in terms of its sustainability. While fiscal sustainability is a term generally used in the health care policy debate, it can also be applied to government programs in general and post-secondary education in particular. One definition of fiscal sustainability can relate the increase in real per capita expenditures to increases in some measure of the real per capita resource base - such as GDP. If real per capita government spending is rising faster than GDP then one may argue that there is a potential long-term sustainability problem. </div>
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For Ontario, I've calculated average annual growth rates of real per capita GDP (in 2002 constant dollars), real per capita tuition revenues and real per capita post-secondary education (deflated using the All items CPI 2002=100) by available category for the period 1990 to 2009 and plotted them in a bar chart (Fig 1.). In addition, I graphed pie charts showing the composition of these post-secondary expenditures in 1990 and 2009 (Figs 2 & 3) to show how composition has evolved over time. A draw-back to this data source is that it is for all post-secondary education with no decomposition into universities and community colleges. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAMKCstZbY3LOHst8IzLh4O5ZJFL6TPtlRHlff2N1pdbBSnsan3dqspJDWeP9E9t3SNPOfRpesCzPTFI1-5xv7rH7mGuyKT3cKR1qfju1-XndS_W-MCu85WqCW2mKaEIzf8PS1n6Fhkb5g/s1600/slide1-112.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhAMKCstZbY3LOHst8IzLh4O5ZJFL6TPtlRHlff2N1pdbBSnsan3dqspJDWeP9E9t3SNPOfRpesCzPTFI1-5xv7rH7mGuyKT3cKR1qfju1-XndS_W-MCu85WqCW2mKaEIzf8PS1n6Fhkb5g/s640/slide1-112.jpg" width="640" /></a></div>
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Generally speaking, real per capita spending on post-secondary education in Ontario has risen faster than the growth rate of the economy which would suggest that future sustainability of the sector is a concern. Yet, the growth rate of spending has been outstripped by the growth rate of tuition revenue. Real per capita tuition revenues over the period 1990 to 2009 grew at an annual average rate of 6.4 percent while the comparable figure for post-secondary expenditure was 2.4 percent. However, tuition revenue rising faster than spending still does not a sustainable system make because tuition does not cover all post-secondary expenditures - the rest is made up with provincial grant funding and other revenues. In 1990. the tuition share of total post-secondary spending in Ontario was 13 percent and it rose to 29 percent by 2009. Students are bearing a greater burden of their university education and the burden has risen faster than the economy's general productivity as measured by real per capita GDP.</div>
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The other interesting thing about Figure 1 is that of the five categories provided for post-secondary spending by these statistics Canada numbers, the one with the lowest growth rate was "Education" at 1.41 percent while the two highest were "Debt charges" and "Student Support" 8.6 and 6.6 percent respectively. Next came "Administration" at 3.5 percent and then the "Other Post-Secondary Education Expenditures" at 3.4 percent. What this suggests is that of all the categories of spending on post-secondary education, the traditional academic function has been the most sustainable with the expenditure surge largely being driven by student support, administration, debt charges and other spending. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidcL7S2BpI2DytilqTitjzSRQrA9BVx6jXvBE5GBpgDVM71IhQ9rTjYc8CZZ-81sRfZNSgdwQAMkBXztpb-GFAZ0McGwuMkkiu3gSvzuAMBnsc642n0gl7qC0NNedQnptFnxiktFXPpGlg/s1600/slide1-113.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidcL7S2BpI2DytilqTitjzSRQrA9BVx6jXvBE5GBpgDVM71IhQ9rTjYc8CZZ-81sRfZNSgdwQAMkBXztpb-GFAZ0McGwuMkkiu3gSvzuAMBnsc642n0gl7qC0NNedQnptFnxiktFXPpGlg/s640/slide1-113.jpg" width="640" /></a></div>
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This in turn has affected composition. (See Figures 2 & 3). In 1990, the education component accounts for 57 percent of post-secondary education spending whereas by 2009 it is down to 46 percent. Administration's share has risen from 17 to 21 percent, student support from 3 to 5.7 percent, debt charges from about one-half of one percent to 1.5 percent and the other category from 22 to 27 percent. </div>
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Obviously,there needs to be an examination of what exactly the priorities of the post-secondary education in Ontario are? Despite calls for a greater emphasis on educating undergraduates, it would appear that there has been a shift away from the academic side. The trend to large classes in many Ontario universities and colleges appears to have freed up resources - some of which were redirected to student support as compensation - but the rest which went to debt charges incurred from capital projects, administration and other spending not directly tied to education. In the case of debt charges, the result could have been worse in terms of its effect if interest rates during this period had been higher. While all of this spending can be viewed as generally unsustainable, it would appear obvious where restraint will need to be exercised the most. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/equity_in_municipal_taxation/"><b>Equity in Municipal Taxation?</b></a></div>
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<li class="li3">Oct 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/business+taxation/"><span class="s2">business taxation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/equity/"><span class="s2">equity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municpal+taxes/"><span class="s2">municpal taxes</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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The City of Thunder Bay is apparently considering a report from their revenue department on bringing about “equity” amongst different property classes. In particular, media reports have stated that the report recommends gradually lowering commercial and industrial tax levels to bring them in line with the provincial average. A shift towards easing the burden on business properties is a feature that has marked Ontario over the last decade. This is naturally going to be a contentious issue given that the burden of municipal taxation over the years in Thunder Bay has already been shifting towards the residential taxpayer given the erosion of the industrial tax base. It is also odd to use the term “equity” in making these proposals as any equity consideration should be within industrial and commercial properties rather than a comparison of industrial and commercial versus residential properties as these properties have quite different functions</div>
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Similarly valued industrial properties in Thunder Bay should be paying similar property taxes just as similarly valued residential properties within Thunder Bay should also be paying similar municipal taxes. Trying to shift the burden more towards residential users by sugar coating it as “fair” or “equitable” seems to be a serious under assessment of the intelligence of the municipal ratepayer. Making a change to lower industrial and commercial taxes in Thunder Bay is not necessarily an “equity” or fairness issue but an economic efficiency issue as taxes in those areas that are higher than the provincial average would theoretically hurt our economic competitiveness in attracting business. However, it should be noted that despite our high municipal tax rates, we appear to have had no recent difficulty in attracting new business investment in hotels, restaurants and commercial retailers.</div>
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The fact of the matter is that all municipal taxes in Thunder Bay are generally viewed as high when comparisons are made with other Ontario municipalities. The most recent BMA Municipal Study 2010 finds that Thunder Bay property taxes are in the mid-high range for residential properties, in the mid-high range for multi-unit residential properties, in the high range for office properties, in the high range for neighborhood commercial properties, in the mid range for hotel/motel properties, in the middle range for standard industrial properties and in the high range for large industrial properties. In comparisons, one does not see a class of property in Thunder Bay associated with low taxes at the municipal level.</div>
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In addition, when figures on municipal tax revenues from business taxation, user fees and residential taxation are examined, they show that between 1990 and 2005, there was an increase the share of total tax revenue paid by residential owners. As the accompanying figure shows, between 1990 and 1997, the residential share of municipal tax revenue (residential, business and user fees) was flat at about 35 percent. It then rose and by 2005 had reached almost 45 percent. Over the same period, business tax revenues as a share of total municipal tax revenue went from 35 percent to 21 percent. In 1990, for every dollar of business tax revenue the City raised, residential provided 97 cents. However, by 2005, for every dollar of business revenue, residential owners were providing $2.14. The largest share of tax revenue is already coming from the residential sector so how shifting the tax burden even further towards residential users is supposed to bring about “equity” is an interesting question.</div>
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Interestingly enough, the data used for this revenue breakdown was published in City of Thunder Bay annual consolidated financial statements until 2005. Since then much more abbreviated financial statements are published which only provide a total revenue figure for taxation. It is interesting how in the age of the inter-net, more and more reports are posted but with less and less information that a taxpayer can use to make informed decisions and choices.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjm6V5xii7YqpH52VGMh4d1re3D5p3TvHNzrQl2eQHmwShzWCotKvu9Auf-bThhoQSe5UJtXtntzNCQn8t4WVTppujtMPeRsCjJMz-_dk2PVeOKa0-_D9q2r6VtGjZGry_qHwM4LezZ2Ecy/s1600/slide1-111.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjm6V5xii7YqpH52VGMh4d1re3D5p3TvHNzrQl2eQHmwShzWCotKvu9Auf-bThhoQSe5UJtXtntzNCQn8t4WVTppujtMPeRsCjJMz-_dk2PVeOKa0-_D9q2r6VtGjZGry_qHwM4LezZ2Ecy/s640/slide1-111.jpg" width="640" /></a></div>
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Here is an interpretation of what has happened. Decades ago, Thunder Bay had a large forest products and transportation sector that afforded a rich municipal tax base that allowed for a very generous program of municipal spending. Since the 1990s, the rich industrial tax base and the property tax revenues it afforded has declined necessitating more of a shift towards the residential taxpayer in order to maintain the expenditure infrastructure. This situation was complicated by the provincial grant cuts and downloading of the mid 1990s though these grant revenues have since recovered. Per capita municipal tax revenues (residential, business and user fee revenues) in Thunder Bay have grown handsomely with the shift to a greater residential burden as the accompanying figure (Fig. 2) shows. However, per capita revenue growth has started to slow and the fiscal sustainability of future municipal spending is now a concern. Moreover, there is the infrastructure deficit in roads and sewers that is also being advanced as a reason for tax increases. However, shifting even more of the burden to residential users is not equity, it is a revenue grab.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/cross-border_travel_at_pigeon_ri/"><b>Cross-Border Travel at Pigeon River</b></a></div>
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<li class="li7"><span class="s4">Oct 23, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/cross-border+travel/"><span class="s2">cross-border travel</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/minnesota/"><span class="s2">minnesota</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/pigeon+river/"><span class="s2">pigeon river</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s2">united states</span></a></span></li>
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Thunder Bay and northwestern Ontario residents have long crossed the border to visit and shop in Grand Portage, Grand Marais and of course Duluth. Moreover, despite the lower regional population of northwestern Ontario relative to Minnesota, the number of Canadians crossing at Pigeon River to visit the United States has always been much larger than the number of Americans visiting Canada at this crossing. However, the long-term trend in cross-border travel between Canada and the United States at the Pigeon River crossing just south of Thunder Bay demonstrates two different long term trends. The number of total crossings obtained from Statistics Canada's counts and plotted in the accompanying figure show that despite the ebbs and flows, the long term trend of Canadians visiting the United States is up over the twenty year period from 1990 to 2010. On the other hand, the number of Americans visitors into Canada at Pigeon River is on a downward trend. </div>
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Short term fluctuations in cross-border travel is mainly affected by personal incomes, the value of the exchange rate, and gasoline prices. For example , the depreciation of the Canadian dollar between 1995 and 2000 is accompanied by a drop in Canadian crossings back into Canada at Pigeon River and an increase in American crossings into Canada. However, despite a high value of the American dollar relative to the Canadian dollar between 2000 and 2006, American visits declined while Canadian visits continued to rise. Indeed, from 2001 to 2010, American crossings into Canada at Pigeon River declined at about 7 percent annually while Canadian crossings back into Canada rose at an average rate of 2.6 percent annually.</div>
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There was an obvious structural change in the determinants of cross-border travel and that was likely the reaction to 9-11 and the border changes that came into effect in the period after 9-11. Moreover, those border changes appear to have had an asymmetric effect. While Canadians continued to cross into the United States in order to visit, vacation and shop, the converse is not true. Americans have been more reluctant to travel across the border. What can be done to entice Americans to cross the border at Pigeon River in greater numbers? The answer to that question is vital given the investment in the waterfront going on in Thunder Bay and the need to attract tourists as an economic diversification activity.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_at_heart_of_t/"><b>Northern Economist at Heart of the Continent Congress</b></a></div>
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<li class="li7"><span class="s4">Oct 23, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/heart+of+the+continent+congress/"><span class="s2">heart of the continent congress</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/minnesota/"><span class="s2">minnesota</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a></span></li>
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The Heart of the Continent Partnership will be holding an international community congress to develop sustainable economic development in the Heart of the Continent Region straddling the Canada-US border between northeastern Minnesota and northwestern Ontario. This region contains 5.5 million aces of public lands that provide opportunities for economic development. There will be attendance from northwestern Ontario and Minnesota as well as other areas of North America at the activities of the congress which will span four days (October 24th-27th) as well as two locations - Fort William Historical Park in Thunder Bay and Grand Portage Lodge in Grand Portage.</div>
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Northern Economist will be there on opening day delivering a presentation that will provide a regional overview of the history, economic structure, trends and economic opportunities in the region. For an agenda of the congress activities, visit the <a href="http://www.heartofthecontinent.org/"><span class="s2">Heart of the Continent </span></a>web site while slides of my talk will be available on my <a href="http://economics.lakeheadu.ca/dimatteo/work.html"><span class="s2">Economics Department</span></a> web site.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-us7YapfNMLyQMV5_EnYS_Lrh8FIk-BAaEPzxM3oEhKwpaQ6KLb_dAml57gpQt7UMu4xQ_5-CAGo0S_HhibKcz1YZIqt07G38qDzC38tqX897HZifiGxUdFwnrVn83_OTLQ1OSI7nMLje/s1600/slide1-110.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj-us7YapfNMLyQMV5_EnYS_Lrh8FIk-BAaEPzxM3oEhKwpaQ6KLb_dAml57gpQt7UMu4xQ_5-CAGo0S_HhibKcz1YZIqt07G38qDzC38tqX897HZifiGxUdFwnrVn83_OTLQ1OSI7nMLje/s640/slide1-110.jpg" width="640" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_winn_1/">Northern Economist in the Winnipeg Free Press</a></b></div>
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<li class="li3">Oct 21, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federalism/"><span class="s2">federalism</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba/"><span class="s2">manitoba</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
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<b>The New Debt Divide</b></div>
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by Livio Di Matteo</div>
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Winnipeg Free Press, October 20, 2011</div>
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THUNDER BAY -- With provincial elections over in Manitoba and Ontario, there will soon be a new preoccupation with the realities of government and particularly the public finances.</div>
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According to the recently released 2011 Federal Fiscal Reference Tables, in 2010-11, Manitoba had a deficit of $467 million and a net debt of $13 billion. Ontario, on the other hand, had a deficit of $14 billion and a net debt that had reached $215 billion.</div>
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A more reasonable comparison is net debt relative to GDP and even here Manitoba's performance is better with a net debt-to-GDP ratio in 2009-10 of 23 per cent compared to Ontario's 33 per cent.</div>
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There has always been an east-west gradient on many Canadian social and economic indicators. But Ontario and Manitoba are examples of a new east-west divide in Canada -- the debt divide.</div>
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When net debt is examined, it turns out Western Canada is in much better fiscal shape than the eastern provinces.</div>
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In terms of the net debt-to-GDP ratio, the average across British Columbia, Alberta, Saskatchewan and Manitoba in 2009-10 was 8.7 per cent, with Manitoba the most indebted of the four western provinces, at least in the debt-to-GDP ratio category.</div>
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On the other hand, the average debt-to-GDP ratio in Atlantic Canada was 34 per cent, while for both Ontario and Quebec, the ratio stands at 41 per cent.</div>
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As Canada's largest provinces, Ontario and Quebec can be expected to have the largest absolute net provincial public debts, but they are also the largest in per-capita terms.</div>
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In 2009-10, the per capita net debt in Quebec was $19,173, while in Ontario it was $14,813. By contrast, Manitoba's was only $9,652. The average for the four Atlantic provinces was $13,143, while the average for the four western provinces was $3,264.</div>
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There is again a major division with the eastern half of the country far more indebted than the western half.</div>
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This is a divide that has been 20 years in the making. In the late 1980s, the debt gap between Canada's provinces was much narrower.</div>
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For example, in 1987-88, the net debt-to-GDP ratio averaged 26 per cent in the Atlantic provinces, 19 per cent in Central Canada and 11 per cent in the West.</div>
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Since then, the debt share of GDP has gone up most dramatically in Central Canada. Ontario and Quebec are the traditional industrial heartlands of the country and bore the brunt of the economic restructuring of the last 20 years, which affected both their public revenues and spending.</div>
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The Atlantic region, having lived with the constraints of weak economies and transfer dependency for a long time, experienced a more modest debt surge relative to GDP.</div>
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As for Western Canada, it has been blessed with a resource product and investment boom, which has translated into better long-term public finances.</div>
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Manitoba represents a transitional province on the east-west debt divide. While its debt-to-GDP performance is superior to the eastern provinces, it is nevertheless the poorest performer among the western provinces.</div>
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Manitoba has a diversified economy that is able to withstand the ups and downs of the business cycle but it has not had the resource bounty of Alberta and Saskatchewan or the offshore investment of British Columbia. It is the most transfer-dependent of the four western provinces, making it more akin to Ontario than Saskatchewan in this regard.</div>
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Why does any of this matter?</div>
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Rising debt levels combined with rising interest rates will generate increasing fiscal pressure on the provision of public services in Ontario and Quebec. If this results in spending cuts, it will fuel a slowdown in the Canadian economy with spillover effects on the rest of the country but particularly the more transfer-dependent provinces.</div>
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This will generate rising strains in the federation between the wealthier provinces -- which are now almost entirely western-based -- and the more transfer-dependent provinces.</div>
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On the one hand, as part of the rising West, Manitoba will have a western outlook when it comes to promoting economic growth and diversification. On the other hand, increased federal assistance to Ontario and Quebec to support their health and education systems may also benefit Manitoba.</div>
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This could lead to an enhanced role for Manitoba as a political bridge between east and west, a sort of broker given its multiple economic interests. Or, it could lead to a polarization of Manitoba politics and growing confusion as to its identity and role within the federation.</div>
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Manitoba will be an interesting meeting ground for the Canadian federation as it wrestles with its role as part of the transfer-dependent East or the vigorous new West.</div>
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Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_fiscal_reminder_for_ontario/"><b>A Fiscal Reminder for Ontario</b></a></div>
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<li class="li7"><span class="s4">Oct 19, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/cabinet/"><span class="s2">cabinet</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/equalization/"><span class="s2">equalization</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/expenditures/"><span class="s2">expenditures</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/finances/"><span class="s2">finances</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal/"><span class="s2">fiscal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenue/"><span class="s2">revenue</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transfers/"><span class="s2">transfers</span></a></span></li>
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Cabinet day is upon us in Ontario and as part of their orientation to their new cabinet posts, ministers might want to take a few minutes to review the province’s public finances given that the election campaign apparently focused on more important matters. The 2011 Federal Fiscal Reference Tables have been released and they provide data for a number of interesting snapshots. </div>
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First, the average annual growth rates in provincial government revenues and expenditures for the period 2003-04 to 2010-11 were 4.8 and 6.2 percent respectively. These are clearly not sustainable and while 2010-11 actually saw revenues grow faster than expenditures, one year of good growth does not a balanced budget make. Indeed, the deficit according to the Fiscal Reference Tables in 2010-11 was still 14 billion dollars and that is the second highest absolute deficit recorded by the Ontario government – after 2009-10 - which was the highest. Ministers can console themselves with the fact that as a share of GDP these deficits are still smaller than those of the early 1990s. </div>
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Second, the sorry state to which Ontario has fallen as an equalization receiving “have not” province did not seem to bother the voters but Ontario is now more transfer dependent than ever when it comes to its revenues. Ontario is now dependent on federal cash transfers for 22 percent of its revenues. In absolute terms, Ontario is now also the second largest equalization recipient. While some may see this as a reversal of the fiscal imbalance and Ontario’s due, the fact is that this transfer share has seen a steady rise since the late 1990s and is also a reflection of the weakness in Ontario’s own source revenue base which in turn is a function of its economic productivity. If one removes federal cash transfers, Ontario own source revenues since 2003-04 only grew at an average of 3.2 percent annually making the fiscal gap an even greater problem. Without federal transfers, Ontario cannot support its current fiscal lifestyle.</div>
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Third, there is the question of the debt. According to the Fiscal Reference Tables, the Ontario net public debt in 2010-11 had reached 214.5 billion dollars. When one looks at it in per capita terms, it has reached over 16,000 dollars per person and has been on a steady upward trend for the last twenty years. Ontario does not have the highest per capita provincial government net debt in the country – that distinction belongs to Quebec – but what it has will prove to be a sufficient drag on the public finances if interest rates begin to climb and boost debt service costs. Moreover, the high debt burden is another indicator of how low the fortunes of central Canada have fallen within the Canadian federation given that as a share of GDP, the provincial net debt burden in Ontario and Quebec now exceeds the average burden of either the western or the Atlantic provinces.</div>
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With these fiscal constraints, the Ontario government will be in a real policy squeeze. On the one hand, they will want to spend money in a manner that meets the expectations of its voter support but they will face a larger and more determined opposition as a result of the minority government outcome. The Ontario government will be hard pressed to stimulate the economy with new spending if a downturn develops, invest in its priority areas of health and education and balance the books. Add to this the high costs of its Green Energy Program for Ontario electricity consumers and it is definitely not going to be much fun being a cabinet minister in Ontario.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjEI_I-CF1twrOCpxwZB8FFA6tgCbhXoaJFfg7IcQYJtcytgvv5TzYsdYeAeG09WWgdEe77DNarmr1vdk0WMeJYokcNZv0WkVJvPFGZfS1TcfQlCp_VreuyVrTbTjElRrAZqQyocpxhVyz/s1600/slide1-108.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjEI_I-CF1twrOCpxwZB8FFA6tgCbhXoaJFfg7IcQYJtcytgvv5TzYsdYeAeG09WWgdEe77DNarmr1vdk0WMeJYokcNZv0WkVJvPFGZfS1TcfQlCp_VreuyVrTbTjElRrAZqQyocpxhVyz/s640/slide1-108.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcZS7PKDuvIgMj8ILZU38oLiuz_2hQZ9B_9ASiFq45eSiiaqBDTgCNl8jke9nlt2yTZ9pZIONkWCh-jslQqH-r0GvD4kXiq8ZxOQD77eZevU13SgMZM68qs83H4k6FhFi6Zo64sj0MB9ft/s1600/slide1-109.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcZS7PKDuvIgMj8ILZU38oLiuz_2hQZ9B_9ASiFq45eSiiaqBDTgCNl8jke9nlt2yTZ9pZIONkWCh-jslQqH-r0GvD4kXiq8ZxOQD77eZevU13SgMZM68qs83H4k6FhFi6Zo64sj0MB9ft/s640/slide1-109.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_housing_prices__anot/"><b>Thunder Bay Housing Prices: Another View</b></a></div>
<ul class="ul1">
<li class="li3">Oct 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+housing+prices/"><span class="s2">real housing prices</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/wealth+effect/"><span class="s2">wealth effect</span></a></li>
</ul>
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It has become the recent conventional local wisdom to remark that Thunder Bay's real estate housing market is "hot" and that prices have finally begun to rise. Given the price increases in other cities, Thunder Bay homeowners have probably felt left out of the wealth increases brought about by rising real estate in other Canadian cities. However, over the last few years, average residential prices as reported by Canada Mortgage and Housing have finally started to rise. In 2000, the average residential price in Thunder Bay was $109,811. By 2010, the average residential price had risen to $144,034 dollars - an increase of nearly 32 percent. Given that prices had been largely stagnant for much of the 1990s, and into the first couple years of the new century, an increase of 32 percent is remarkable. However, it is still not as remarkable an increase as some other Canadian cities. Winnipeg, for example, over the 2000-2010 period saw its average residential prices rise by 134 percent. </div>
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Of course, one might argue that we should compare Thunder Bay to similarly sized cities. Our northern counterpart, Sudbury, saw its prices rise from 109,262 dollars in 2000 to 200,947 dollars in 2010 - an increase of 84 percent. Kingston and Peterborough saw similar increases over this period. Nonetheless, one could argue that Thunder Bay's performance is outstanding given that employment over the same period dropped by about 10 percent and the city's GDP dropped by about as much. However, the one thing to take note of is that the 44 percent increase is an increase in nominal house values. Once you take inflation into account, you would have the real or inflation-adjusted value of the housing increase. I've done that and produced the results in the accompanying graph for both Thunder Bay and Sudbury. I used the CPI-all items index for Ontario as the inflation measure. Once you convert everything into 2002 dollars, one finds that the average real residential price in Thunder Bay from 2000 to 2010 rose from 115,469 dollars to 123,634 dollars - a real increase of 7 percent over the 10 year period or a real return of less than one percent a year. By way of comparison, in Sudbury, even after inflation is taken into account, the real increase was still 66 percent. </div>
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I suppose it gets even worse if you consider that during the 10 years you lived in an average house that you purchased for just over 100,000 dollars you probably would have spent thousands of dollars in property taxes as well as substantial amounts for maintenance and renovations. Residential property taxes in Thunder Bay may not seem high when you compare them to municipal averages for similarly sized cities in Ontario until you express the average tax paid as a percentage of the average residential price. </div>
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For example, in Thunder Bay the BMA Group reports that the average residential tax paid for a bungalow in 2010 was 3,042 dollars while in Sudbury it was 2,522 dollars and in Hamilton, 3,540 dollars. However, when you take the tax paid as a percentage of the average residential price you get 2.1 percent in Thunder Bay, 1.3 percent in Sudbury and about 1.2 percent in Hamilton. Given that property taxes are supposed to be for services to property and are based on the assessed value of property, Thunder Bay residents are paying much higher effective tax rates. Of course, this is the result of the erosion of the industrial tax base which has resulted in a shift to residential owners in an effort to maintain services and expenditures.</div>
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In the end, the burden of home ownership in Thunder Bay has likely produced a negative real economic return over the first decade of the 21st century. Contrast this with other cities where even after inflation, property taxes and maintenance costs are factored in, the real return has still been overwhelmingly positive. Moreover, in the absence of any retrenchment in housing prices, this return can be expected to grow.</div>
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Now of course, home ownership is not supposed to be a financial or economic investment, it is supposed to be a lifestyle choice. You buy a house because you want to own a home with a surrounding yard and not necessarily because you expect to make a lot of money from selling it 10 or 15 years down the road. However, in the case of Thunder Bay, this lifestyle choice comes with a lot of foregone benefits given that in other cities you would have been able to buy a home as a lifestyle choice and still make money on it due to its appreciation as an asset. Perhaps one can argue that by living in Thunder Bay and buying property here, there are other compensating benefits in the form of a more laid-back and stress-free life. On the other hand, given some of the recent public debates in Thunder Bay over the location of cellphone towers, new commercial developments and wind mills, and the constant stories about crime, just how stress free is living in Thunder Bay compared to other urban centres? Add to that the thought of seeing the real value of your property stay flat in real terms for decades on end and you really can start to feel stressed.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyoly1UM09fLhtovgglua7RmX4-3rhmhoQ9sFuiUmz73Cfn2LmihDK5WJMobJlubTdl_jTlnYgrNHNt-fa470YOQY-qYyxv_6sPv6rI2Q1IcHlx0gGvG6goUSX_3RrSylSImz3yTSp752z/s1600/slide1-106.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyoly1UM09fLhtovgglua7RmX4-3rhmhoQ9sFuiUmz73Cfn2LmihDK5WJMobJlubTdl_jTlnYgrNHNt-fa470YOQY-qYyxv_6sPv6rI2Q1IcHlx0gGvG6goUSX_3RrSylSImz3yTSp752z/s640/slide1-106.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/who_will_be_the_northern_ministe/"><b>Who Will be the Northern Minister(s)?</b></a></div>
<ul class="ul1">
<li class="li3">Oct 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/cabinet/"><span class="s2">cabinet</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ministers/"><span class="s2">ministers</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north/"><span class="s2">north</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/october+20th/"><span class="s2">october 20th</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
</ul>
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On Thursday October 20th, Premier McGuinty will unveil his new cabinet and until then there will be much speculation as to which of his Northern MPPS will get in. As we all know, prior to the election, Rick Bartolucci was Minister of Municipal Affairs and Housing while Michael Gravelle was Minister of Northern Development and Mines and Forestry. Having two cabinet ministers from the North did not do much for Liberal fortunes in the North and their seven seats have shrunk to four. Of the four current MPPS, who will make it into cabinet?</div>
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One possibility is that given the minority government situation and the beating taken from Northern voters, the Premier will take the safe route and opt for the status quo and retain Gravelle and Bartolucci in their current posts. However, this is a new government and the Premier may opt for fresh faces. </div>
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The Premier has a choice of Bill Mauro (Thunder Bay-Atikokan), Michael Gravelle (Thunder Bay-Superior North), Rick Bartolucci (Sudbury) and David Orazietti (Sault Ste. Marie). Given that the number of Liberal MPPS has shrunk from 71 to 53, there will likely be a smaller cabinet - count on closer to 20-22 cabinet ministers rather than the previous 28. This will also be a signal of the coming "austerity" due to the deficit and the slowing economy. This means that there may probably only be one "northern minister" this time and it will most likely be Northern Development Mines and Forestry though there is always the possibility that it could be Natural Resources. </div>
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A look through the recent roles of the four Liberal MPPS would suggest that if it comes down to only one choice, David Orazietti is probably best poised to enter cabinet. He seems to have the biggest recent list of legislative assistantships and chairmanships - comparable to Bartolucci in the late 1990s. He is young and the Premier may be looking for fresh blood after both Gravelle and Bartolucci. He has served as Parliamentary Assistant to both the Minister of Natural Resources and Northern Development and Mines making him familiar with both portfolios. As well, of the four northern Liberal MPPs, he won by the largest margin - approximately 7,000 votes over the second place finisher - compared to about 2600 for Gravelle, 450 for Mauro and 500 for Bartolucci. Given the relative youth and energy of Orazietti and the slimmer cabinet, the Premier may even decide to be innovative and combine the Northern Development and Natural Resource portfolios into one under Orazietti</div>
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Where does this leave the other three MPPs? Well, they are all "team players" and no doubt will happily abide with whatever decision the premier makes. How the electorate in Sudbury or Thunder Bay will feel is another matter. However, given that northern cabinet ministers have recently come from Sudbury or Thunder Bay, rotating the position to someone from Sault Ste. Marie will likely also be seen as "fair" at least by government supporters. We shall see what Thursday brings.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/assessing_knowledge_economy_grow/"><b>Assessing Knowledge Economy Growth in the North</b></a></div>
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<li class="li3">Oct 15, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: none</li>
</ul>
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An important feature of the diversification of the economy of Northern Ontario is in the continued growth of the knowledge economy. One measure of the knowledge economy's growth is employment in professional, technical and scientific occupations (PTSO). While the knowledge economy is certainly broader than this category alone, this is nonetheless an important and readily quantifiable sector. Data from Statistics Canada shows that there has indeed been growth in these occupations over the last twenty years in Northern Ontario.</div>
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As the accompanying graphs below show, there has been growth in the absolute number of people employed in professional, technical and scientific employment in both Northeastern and Northwestern Ontario. Average annual growth rates in employment of PTSO over the period 1988 to 2011(first nine months only) were 5.1 percent in the Northeast and 3.1 percent in the Northwest. Based on a linear time trend, an average of 224 PTSO jobs a year were added in the Northeast over this period and 67 a year in the Northwest. Growth in the absolute number of these occupations does appear to have been more robust in the Northeast.</div>
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However, it is also important to consider these knowledge economy jobs as a proportion of total employment. It would appear that they constitute a small but growing proportion of total employment. The proportion of total employment in PTSO grew in the Northeast from 1.96 percent in 1988 to reach 4.1 percent by 2011. Meanwhile, in the Northwest over the same period it grew from 2.7 to 4.3 percent. At present, their share of employment in both regions is about the same.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWWaUc1UK439artkYg9eN352yOaaB3xJcPrbkDWo0XILKk-wPUSlOQe2rJWln9DKqOyxGaJRzOCXdOGs_RLGVfc-6LvT6fg4YCy_o6Et2I54vznkH0nL98IcWKzr8NSBjo0ZhSrnsRz-fQ/s1600/slide1-105.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWWaUc1UK439artkYg9eN352yOaaB3xJcPrbkDWo0XILKk-wPUSlOQe2rJWln9DKqOyxGaJRzOCXdOGs_RLGVfc-6LvT6fg4YCy_o6Et2I54vznkH0nL98IcWKzr8NSBjo0ZhSrnsRz-fQ/s640/slide1-105.jpg" width="640" /></a></div>
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Statistics Canada Data Series Used:</div>
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v2439626; v2439637; v2439645; v2439656</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/sustaining_universities/"><b>Sustaining Universities</b></a></div>
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<li class="li3">Oct 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/sustainability/"><span class="s2">sustainability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/universities/"><span class="s2">universities</span></a></li>
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Judging from some of the ruminating going on in the media lately, it would appear that Canadian universities will soon be facing a new assault under the mantra of sustainability. Some of this is a spillover from the United States where rising tuition fees have exceeded the general inflation rate fostering a view that higher education in the United States is another “bubble” waiting to burst and that once it does universities will be forced to close programs. Canada is not the United States, but the discussion here can be summarized by Tuesday’s editorial in the Globe and Mail “Reform or Perish” which among other things states:</div>
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“Classes of 500 students or more taught by an emerging cohort of indentured PhDs who carry a growing share of teaching ‘burden’ but have little hope of long-term employment. Professors who get ‘relief’ from teaching obligations to pursue research. Classes and courses of study that prize particular academic disciplines rather than make the connections among disciplines that are so crucial to learning. For students, its unacceptable; for taxpayers and families who spend tens of billions of dollars each year, it’s unsustainable.” </div>
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The hard evidence offered in the Globe’s editorial is that we are getting less for more and that the quality of the undergraduate experience has suffered. In particular, they cite the increase of the ratio of full-time students to full-time faculty, the reduction in faculty teaching loads and that faculty income growth has outpaced the rate of inflation. In essence, they have offered what can be interpreted as a faculty- centered explanation of fiscal sustainability in post-secondary education.</div>
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We of course are familiar with the sustainability debate in health care, where health spending growth rates in excess of growth rates in the resource base are seen as a sign of lack of sustainability. If post-secondary education is not fiscally sustainable, then one would expect to see a similar type of measure. Saying the health care system is not sustainable simply because the number of patients per physician has increased, doctors serve fewer ER hours and their income growth outpaced the inflation rate would ignore the fact that health care is a system with multiple expenditure categories and players. Similarly, one needs a broader picture of sustainability for post-secondary education. For a closer look at the issue, visit my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/10/sustainable-universities.html#more"><span class="s2">Worthwhile Canadian Initiative.</span></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/is_economic_growth_in_the_north_/"><b>Is Economic Growth in the North on an Upswing?</b></a></div>
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<li class="li3">Oct 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/norther+ontario/"><span class="s2">norther ontario</span></a></li>
</ul>
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The September labour force numbers released by Statistics Canada for the regional economy seem to contain some relatively good news for both the Northeast and Northwestern regions of Northern Ontario. In the Northeast, monthly employment levels showed a slight decline between the middle of 2010 and spring 2011. However, May to August have registered consecutive monthly increases and despite the small drop in September, the last six months have seen increasing employment in the Northeast. As for the Northwest, the decline in employment underway over the last year and a half seems to have come to an end starting in April of 2011. There have now been six consecutive months of rising employment in northwestern Ontario and total employment has gone from 92,200 in March 2011 to reach 102,600 in September of 2011. This is an increase of about 11 percent. However, these are not seasonally adjusted numbers. If one examines annualized growth rates for the last six months, they are still negative for the Northwest until the summer. However, August and September have registered positive employment growth rates on a year to year basis which provides further hope that the long-term employment decline may finally be about to reverse itself. There is substantial construction activity underway in the Northwest, particularly in and around Thunder Bay and this is likely also being captured in the August and September growth rates.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_tn-0ypr1jYkt0UEQYDFnQQ9KsF64IfZXcvs4zirfl8RQjXqYoNfXJBzJV0v-8Xt0t7haiTSdFMBeO_oRAXeVVv8DX4ALxIKmXe4Pq1zklsEAtUQXVtdPPM-2g0jdxqpwWqc_zt4GGPiI/s1600/slide1-103.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_tn-0ypr1jYkt0UEQYDFnQQ9KsF64IfZXcvs4zirfl8RQjXqYoNfXJBzJV0v-8Xt0t7haiTSdFMBeO_oRAXeVVv8DX4ALxIKmXe4Pq1zklsEAtUQXVtdPPM-2g0jdxqpwWqc_zt4GGPiI/s640/slide1-103.jpg" width="640" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYbBlA7gZB0AvDCeYHURhESyiJMVDy8A4v148vjPzTmxFNqtzFS0NyhA6y0epR3nd44FkK5AJ7Y22nTMmAJNKHhzPIYwoKKZ6_zLkHhfANIW8-TVUJWBsGOgX54AQUanuN95KWkT6WsTvI/s1600/slide1-104.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYbBlA7gZB0AvDCeYHURhESyiJMVDy8A4v148vjPzTmxFNqtzFS0NyhA6y0epR3nd44FkK5AJ7Y22nTMmAJNKHhzPIYwoKKZ6_zLkHhfANIW8-TVUJWBsGOgX54AQUanuN95KWkT6WsTvI/s640/slide1-104.jpg" width="640" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/the_divided_north/">The Divided North</a></b></div>
<ul class="ul1">
<li class="li3">Oct 10, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/divisions/"><span class="s2">divisions</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election+results/"><span class="s2">election results</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/rural/"><span class="s2">rural</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban/"><span class="s2">urban</span></a></li>
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One of the most interesting results of the October 6<span class="s3"><sup>th</sup></span> provincial election is the urban rural divide in Ontario – a divide that also characterizes the North. The GTA is mainly Liberal red with a few NDP exceptions and the Ottawa area is largely Liberal. A glance at the <a href="http://speakyourmind.thestar.com/election-results/"><span class="s2">Toronto Star’s election map</span></a> paints the North as a sea of orange with islands of red in Sudbury and the Sault – and somewhat larger swaths in Thunder Bay-Superior North and Thunder Bay Atikokan. Those two ridings, however are dominated by Thunder Bay which makes them mainly urban. As for the Near North, Muskoka-Parry Sound and Nipissing, they are both Progressive Conservative but are more traditional rural areas that have been long-time areas of conservative support.</div>
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What might this mean? For the two major Ontario political parties, their leaderships will need to get to work devising strategies to bring in their respective alienated voters. For the Liberals, whose policies in Green Energy and knowledge and health sector economy investments are seen as primarily urban policies, they will need to craft policies that appeal to rural voters. For the Progressive Conservatives, they will need to create policies that appeal to their rural base and also attract urban voters without alienating their rural base. For the New Democrats, their support seems to be Northern resource rural and southern Ontario industrial urban – suggesting their appeal is protest against the job losses from economic change but how they plan to keep such diverse voters together will be a challenge.</div>
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For the North, these results suggest an even greater division to add along to the ones of geography. The voters of the larger cities of the urban North seem to have more in common with voters in downtown Toronto than in the rural resource hinterlands outside their cities. In Thunder Bay, for example, while the forest sector crisis led to major job losses, much of the government investment in health, research and education also went into Thunder Bay making it a beneficiary of the provincial government’s urban oriented policies. The area outside of Thunder Bay, on the other hand, has had a much tougher go. It bore the brunt of employment losses but does not have the population density to benefit from knowledge sector urban style investments. It is likely a similar story in the northeast in the relationship between Sudbury and the Sault and their surrounding regions. For a region with wide distances and low population density in general, this additional internal divide will make it more difficult to find common ground on northern policies and strategies.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_day_after___/"><b>The Day After...</b></a></div>
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<li class="li3">Oct 7, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/majority/"><span class="s2">majority</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/minority/"><span class="s2">minority</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/results/"><span class="s2">results</span></a></li>
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Well the results are in and we have a minority Liberal government that depending on how the Speaker is assigned could become a razor thin majority. At first glance, this may seem close to the 'worst case' scenarios for Northern Ontario that I outlined in my October 4th post. We have a Liberal provincial government but the North only returned four Liberals (out of seven previous) while also electing five NDP (3 previously) and two Conservatives (1 previously). A large reduction in Liberal representation in the North combined with a massive Liberal majority probably would have been the worst case scenario. However, the Liberal mandate has been considerably weakened both in the province as a whole as well as the North which should send a strong message that not everyone was happy with Liberal policies. The Liberals lost about one third of their seats in Ontario overall but in the North it was 40 percent. At the same time, there is still representation from the North in the government as well as a strong set of regional opposing voices that will generate the necessary pressure to address Northern issues given the fragility of the razor-thin majority. In a sense, the new government will be stable if necessary but not necessarily stable and the northern MPPs in the liberal caucus should have a larger voice even if they are diminished in numbers. There should be a lot more political competition in the North - a competition that will be beneficial to getting new ideas out there. One challenge will be the urban-rural divide as the government side representation from the north will be from Thunder Bay, the Sault and Sudbury - its largest urban centers. This does appear to reflect the urban/rural divide in Ontario as a whole when it comes to support for the governing Liberals. The provincial Liberal government will need to reach out from the cities to the countryside across the province.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/changing_demographic_forecasts/"><b>Changing Demographic Forecasts</b></a></div>
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<li class="li3">Oct 6, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/forecasts/"><span class="s2">forecasts</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s2">population</span></a></li>
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Northwestern Ontarians might be interested to learn that the dire forecasts of a shrinking population that were driving debate only a few years ago have been replaced by new forecasts that show a population that is essentially going to stabilize at just below where it currently is. According to the Ontario Ministry of Finance's 2005 Ontario Population Projections 2004-2031, between 2011 and 2031, Northwestern Ontario's population according to its reference base case would drop from 237,600 to 224,900 - a decline of 5.3 percent. Yet, in its 2011 Ontario Population Projections 2010-2036 it now estimates the region's population in 2011 to be 240,600 and expects it to be 240,600 in 2031. It now projects a slight decline by 2036 to 238,400 but essentially population is now expected to remain constant over the next thirty years. While the region's share of the province's population will still decline, the dire shrinkage scenario seems to have disappeared. Why? The earlier forecasts probably did not take the growing aboriginal population fully into account - something that only became apparent with the 2006 Census of Canada. Once the 2011 Census results are released, who knows what further revisions may occur. We could very well see forecasts of population increases over the next few decades. It goes to show how cautious indeed we need to be when making policy decisions on government spending and service provision given that forecasts even for something as predictable as population are subject to substantial revision.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4oYoJIepsOfIlt92tz52_kZO_gvk3AjV5Uys6ZM22rOf19dYjaQOH1-9GAddCPGswGyUw0_g-92yoCxHtaDM5tdUTf7EkxH7TeGLlCaFea2jg9NswwJ-jPlRefTm_8LUBL2N7lO00QNen/s1600/slide1-102.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4oYoJIepsOfIlt92tz52_kZO_gvk3AjV5Uys6ZM22rOf19dYjaQOH1-9GAddCPGswGyUw0_g-92yoCxHtaDM5tdUTf7EkxH7TeGLlCaFea2jg9NswwJ-jPlRefTm_8LUBL2N7lO00QNen/s640/slide1-102.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/election_eve__looking_ahead_at_p/"><b>Election Eve: Looking Ahead at Post-Election</b></a></div>
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<li class="li3">Oct 4, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north/"><span class="s2">north</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/outcomes/"><span class="s2">outcomes</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policies/"><span class="s2">policies</span></a></li>
</ul>
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The time has comes to take stock of the implications for the North of the potential outcomes of the October 6<span class="s3"><sup>th</sup></span> provincial election. According to the polls, it is a close race and the possibility of a minority government is high. At the same time, polls do not always fully predict the outcome and much depends on the concentration of party support across the various ridings, as well as the actual voter turnout. What can we expect the morning after?</div>
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Whatever party forms the government, expect to see the donning of sackcloth and ashes as it suddenly becomes apparent that the economy is on the verge of recession, the stock markets have dropped 20 percent and the province’s coffers are bare as a result of a massive deficit. All those rosy revenue forecasts that were going to see the budget balanced by 2017 will now go out the window. Expect to see announcements of government expenditure cuts, freezes and restructuring as well as the discussion of temporary “revenue enhancements.” A Liberal or NDP backed government will likely favor revenue enhancements over expenditure cuts while a Conservative government is more likely to favor cuts or restructuring. </div>
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Should the Liberals win another majority, it will be interpreted as a vindication for their program of policies, especially their job creation strategy focused on Green Energy. As for the North, it means the Far North Act will stay in place. For northern Ontario, a Liberal majority win will put it in an odd situation. If the North returns Liberal members and there is a Liberal majority, it means that any future complaints about the government’s economic policies towards the North especially with respect to energy, the forest sector and natural resource development will be taken with a grain of salt and Northerners dismissed as simply habitual complainers. On the other hand, not returning Liberal members to a Liberal majority after the substantial investments that the Liberals have made in the North’s knowledge economy, research and health sectors and road construction will be seen as adolescent ingratitude. With a Liberal majority, the North could be in a political no-win situation.</div>
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If there is a Conservative or Liberal minority, the situation becomes much more fluid for the North. Either will likely be short-lived as given the differences between the parties, a formal alliance or coalition that might provide stable government is unlikely. For the North, a minority government will provide it with more opportunities to get its points across as every party will now be much more sensitive to opinions even from smaller and more remote regions. A minority government, because of its inherent fragility, is much more open to debate and compromise. The parties need to work together and that forces a degree of consultation and accommodation that takes multiple points of view into account. On the other hand, a minority government may be less able to take concrete action especially given the fiscal situation. Moreover, a minority government could place a halt to the public investment in research and knowledge economy jobs that has been driving the northern economic transition. The Ontario minority government of the 1980s saw the creation of Northern Health Travel grants and the Heritage Fund. On the other hand, there was not a looming 250 billion dollar provincial debt in the 1980s and an international sovereign debt crisis.</div>
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Are there any wild cards in all of this? Is there a possible Conservative majority? Not really likely based on the polls but then nobody saw Bob Rae’s NDP victory coming in 1990 either. A Conservative majority would help create an environment that would boost private sector job creation in the North but it would also be accompanied by public sector austerity that would hurt the North disproportionately given its dependence on government spending for job creation. The North’s dependence on public sector funds for job creation has grown in the wake of the forest sector crisis. </div>
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Of course, nobody is forecasting an NDP government this time, but who knows? An NDP majority government may have campaigned on “Respect for the North” but once in power would also face the same constraints as any other government. There will be respect for the North when necessary but the most respect would flow towards the greatest mass of voters – and they are in the South, not in the North. As for the NDP economic strategy, what short term benefits it creates will come at the expense of the long-term competitiveness of the Ontario economy.</div>
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As a sign of where the priorities really lie, consider the fact that in all of the main party platforms, there was no real mention of new institutions for the North or any real policy of decentralization or devolution of decision-making when it comes to northern resource development. On the other hand, there seems to be no real demand in the North for new institutions either. Northerners seem to be quite happy in their role as an economic dependency punctuated by bouts of adolescent outrage. They will be dealt with accordingly no matter who forms the government. As for new decentralized decision making institutions for the North? Their day will come when the growing aboriginal population in the region reaches a critical mass and articulates a compelling case for a new deal. When that day comes, it will be a call that no provincial government will be able to ignore.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/how_are_the_neighbours_doing_a_h/"><b>How Are the Neighbours Doing? A Heartlandia Snapshot</b></a></div>
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<li class="li8"><span class="s4">Oct 3, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+performance/"><span class="s2">economic performance</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/heartlandia/"><span class="s2">heartlandia</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba/"><span class="s2">manitoba</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/minnesota/"><span class="s2">minnesota</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north+dakota/"><span class="s2">north dakota</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+gdp/"><span class="s2">real gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/saskatchewan/"><span class="s2">saskatchewan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/south+dakota/"><span class="s2">south dakota</span></a></span></li>
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The North American central cross-border economic region of Saskatchewan, Manitoba, North and South Dakota, Minnesota and Northwestern Ontario - otherwise known as "Heartlandia" covers 2.4 million square kilometers and has a population of nearly 9 million people. It is centrally located and contains vital transportation corridors, is well endowed with natural resources and agricultural land and is also a repository of knowledge intensive industries especially in the larger urban centers. For us living in Northwestern Ontario, it should represent a natural set of trading partners and markets for our goods.</div>
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What is interesting is how well some of the members of the Heartlandian community have fared over the last few years despite the Great Recession. The accompanying figure plots real GDP growth rates (%) for the constituent economies of Heartlandia. The American numbers are from the Bureau of Economic Analysis estimates of gross state product with 2010 as an "advance statistic". The numbers for Saskatchewan and Manitoba are from Statistics Canada with 2010 as a forecast taken off of government finance web sites. The numbers for Thunder Bay are a proxy for Northwestern Ontario and were obtained from the Conference Board metropolitan outlook series. With half of Northwestern Ontario's population in the Thunder Bay region, these numbers are a suitable proxy for the Northwestern region.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtlrr9PP63FrDBUgEE8WBIAEmgeLGiFqUF2dYX5gO9RBblBzYrmCdROwDE44dJw1F9fm7r07bqld4KP0tanQibsYwvl946SmVPYWgrvO7mbWoMEpjyzBAHFYLmjEEZJ9EwW49TOci7te-i/s1600/slide1-101.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtlrr9PP63FrDBUgEE8WBIAEmgeLGiFqUF2dYX5gO9RBblBzYrmCdROwDE44dJw1F9fm7r07bqld4KP0tanQibsYwvl946SmVPYWgrvO7mbWoMEpjyzBAHFYLmjEEZJ9EwW49TOci7te-i/s640/slide1-101.jpg" width="640" /></a></div>
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The results show that Northwestern Ontario has fared the worst over the last few years, followed by Minnesota which was hit exceptionally hard in 2009 but in 2010 seems to have a solid recovery underway. Manitoba and Saskatchewan have also done quite well though they were marked by near zero growth in 2009 - nevertheless a respectable performance given the GDP declines in so many parts of the world. The real high performers however are North and South Dakota. The Great Recession in those states merely saw a drop in the real GDP growth rate to below 2 percent. For 2010, North Dakota is expected to come in at just over 7 percent real growth with South Dakota lagging at just over 2 percent. Strong performances in Manitoba and the Dakotas should be a source of opportunity for business in Northwestern Ontario.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_medieval_heritage_of_ontario/"><b>The Medieval Heritage of Ontario Political Parties</b></a></div>
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<li class="li8"><span class="s4">Oct 1, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/%C2%A0medieval+thought/"><span class="s2"> medieval thought</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/political+philosophies/"><span class="s2">political philosophies</span></a></span></li>
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In the Ontario election campaign, both the Ontario Conservatives and the NDP have put in their platforms pledges to remove the HST from home hydro bills and home heating. It is argued that these items are not luxuries and the HST has made life less affordable for families. The NDP goes a step further arguing that it will take the HST off of daily essentials including a reduction on gasoline at the pumps. Furthermore, if elected they plan to put in a weekly gasoline price ceiling. This view of certain consumer goods as essentials that should be treated differently from other less essential consumer goods when it comes to either taxation or price regulation in general struck a bell for me this week as I finished delivering my set of lectures on ancient and medieval economic thought. </div>
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From time to time we see political debates and initiatives that call for things like capping gasoline prices, reducing the high interest rates on credit card bills or lowering tax rates on essential consumer items. I think the reason the fundamental arguments driving these discussions seem so contrary to how economic theory would approach these issues is because they are rooted in views that predate modern economic thought. The call for regulation of gasoline prices strikes me with overtones of the debates over the “just price” which concerned much of the work of St. Thomas Acquinas and medieval economic thought, which in turn was derived from Greek and Biblical thinking as well as Roman Law. The occasional cries for credit card companies to lower their interest rates call back to the Roman Catholic church’s prohibitions on usury as when it came to loans it was a sin to demand more than what was given. This type of thinking has probably also marked public attitudes towards the government taxation of essential goods such as gasoline and heating oil, which are seen as essential for daily life and therefore should be treated differently. For a more detailed analysis, see my recent post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/10/the-long-hand-of-medieval-economic-thought.html"><span class="s2">Worthwhile Canadian Initiative.</span></a></div>
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It may seem odd that both the NDP and the Conservatives are proposing similar policies given their political philosophies but then both of their philosophies are rooted in a long history of political and economic thought going back centuries.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-42010915210981332332016-12-14T15:31:00.003-08:002017-05-28T05:51:09.371-07:00September 2011 Posts<div class="p1">
<b>20 Posts from September 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_mysteries__the_sound/"><b>Thunder Bay Mysteries: The Sounds of Silence</b></a></div>
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<li class="li3"><span class="s1">Sep 28, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/accountability/"><span class="s3">accountability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/democracy/"><span class="s3">democracy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s3">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy+institute/"><span class="s3">policy institute</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transparency/"><span class="s3">transparency</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/waterfront/"><span class="s3">waterfront</span></a></span></li>
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Thunder Bay's political scene is fascinating because it is often punctuated by issues that generate substantial controversy or excitement and then they proceed to fade away into obscurity and silence. Three recent ones come to mind:</div>
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1. When will construction start on the waterfront hotel and condos? While the waterfront has been a flurry of construction activity, all has been silent on exactly what new hotel is going to anchor the development and indeed when construction will start. I do recall a deputation to council some time ago by the developers asking for the height of the project to be increased but since then, there has been silence...Will there soon be a beacon of light?</div>
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2. What ever happened to the proposed hotel and mega Tim Horton's development slated for the treed area at the corner of John and Junot? There was a rather heated public meeting with neighborhood residents on the issue and the issue was supposed to be discussed at June's council meeting but since then nothing has been heard. The Mayor came out and stated he did not want to see the development go through in a residential neighborhood. Has the project been dropped or will the issue be quietly slipped into a meeting at a time of the year when people are preoccupied with other issues - say December with Christmas - and then quietly passed so construction can start in the spring? Will we hear an outcome soon or can we expect continued silence...</div>
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3. The provincial government's Northern Growth Plan promised a "Policy Institute" to deal with Northern Ontario policy research and allow northerners to help craft their own regional policies. In March,<a href="http://www.tbnewswatch.com/news/135322/Provincial-dollars-to-fund-Northern-Policy-Institute"><span class="s3"> provincial dollars ( 5 million from the Heritage Fund) to fund the institute were announced and the presidents of Laurentian and Lakehead tasked to guide implementation</span></a>. It apparently was even mentioned at the Think North II Summit. So what happened? Nothing has been announced yet. More ominously, Minister Gravelle's four page <a href="http://www.michaelgravelle.ca/"><span class="s3">Summer 2011 Newsletter</span></a> does not even mention the northern Policy Institute once. All is quiet. All is calm. We are in the midst of the election and it has not even been re-promised. There is silence...</div>
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Democracy is supposed to be a process whereby otherwise ordinary people can participate in the decision making and governance of their society. Part of the process requires transparency with public issues, particularly when public money is involved. Given all the public money being spent on the waterfront development and the centrality of private sector investment to the development plan, when will we see construction of the condos and hotel begin? This is an important issue given that we are about to embark on another massive public sector project - the multiplex - that will also require public investment. Given the neighborhood impact of the proposed development on Junot and John and the neighborhood concern, when exactly will Council discuss it and a decision be rendered? Given the promises made by the provincial government towards a Northern Ontario Public Policy institute, why has it disappeared from local discussion? What has happened to the five million dollars earmarked for it? Does anyone know? Does anyone even care?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/did_the_earth_move_for_horwath/"><b>Did the Earth Move for Horwath?</b></a></div>
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<li class="li7">Sep 28, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/minority+government/"><span class="s3">minority government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s3">twitter</span></a></li>
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Who won last night's Ontario leader's debate? From the bit of the debate I saw, there were no clear winners and losers and all three leaders managed to hold their own reasonably well. However, for an incumbent, holding your own may not be enough and an examination of the number of Twitter followers suggests that Dalton McGuinty may be the debate loser. McGuinty's share of Twitter followers has declined slightly during the month of September from 45 percent on September 7th to 44 percent on September 26th while the shares of Mike Schreiner and Tim Hudak remained the same at 6 percent and 30 percent respectively. Andrea Horwath increased her share slightly over this period from 19 to 20 percent. The debate was held yesterday and as of today, McGuinty is now down to 43 percent while Horwath is up to 21 percent while Schreiner and Hudak are still at 6 percent and 30 percent respectively. In one day, there was a greater shift than occurred during the first couple weeks of the campaign. This could signal that many voters perceive Horwath the most favorably in the wake of the debate.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihs_5ZR-Hq0AJCbKzZ_c2x1kZ566Xsk3XXmqIi0jQYz8YCfzojTmBIShswMDS4OLueZ29iqWfnZcnbVjOi5ZV5EODuCaoOiCP-3AH6IjJBLjzn1s6MyxGCqJ72PyzuwxOR2Z-33mgnaUcb/s1600/slide1-100.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihs_5ZR-Hq0AJCbKzZ_c2x1kZ566Xsk3XXmqIi0jQYz8YCfzojTmBIShswMDS4OLueZ29iqWfnZcnbVjOi5ZV5EODuCaoOiCP-3AH6IjJBLjzn1s6MyxGCqJ72PyzuwxOR2Z-33mgnaUcb/s640/slide1-100.jpg" width="640" /></a></div>
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The earth may have finally begun to move. It would appear that based on the number of Twitter followers, Horwath is up, McGuinty is down and Hudak is holding his own. Polls have indicated a close race with a potential minority government situation after October 6th. Should this type of preference shift continue over the days leading to October 6th we could very well be on the road to a Conservative minority government as the NDP erode the Liberal vote. </div>
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P.S. By the way, did anyone notice if any part of the debate dealt explicitly with Northern Ontario economic issues? If it did, I seem to have missed it.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/an_analysis_of_employment_growth/"><b>An Analysis of Employment Growth: Ontario and the Northwest</b></a></div>
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<li class="li7">Sep 27, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s3">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s3">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwest+ontario/"><span class="s3">northwest ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a></li>
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I've taken the monthly employment numbers for all of Ontario and for Northwestern Ontario for the period 1990 to 2011 from Statistics Canada. These are three month moving averages unadjusted for seasonality but I then use them to construct annualized growth rates for each month. For those of you who are interested, the two Statistics Canada series are: v2054703 and v2054737. The results are quite interesting. When you simply plot the growth rates for both Ontario and the Northwest against time (Figure 1), you get a picture of wider swings in employment growth in the Northwest versus Ontario as a whole. As well, you can see that while there were some periods when employment growth was negative or positive for both, there are times when they move in opposite directions. For example, the recession of the early 1990s see both the Northwest and Ontario with negative employment growth. However, the period from 1996 to 1998 sees the Northwest with negative employment growth while Ontario is generally positive. Ontario and the northwest are both positive again from about 1998 to 2000 but then Ontario continues to see positive employment growth rates while the Northwest is negative again. As we move forward, the recession period in 2009 sees both the Northwest and Ontario with negative employment growth rates but the recovery since 2010 after a brief spurt in the northwest sees a return to negative growth in our region while Ontario is in positive territory.</div>
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<b>Figure 1</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiscWH4N2lKk1oeYUHceRFmGN2ev1Dgudxfhd8k4lBTwuFrxd2m1c0zqxPgcN_6fpCJtL2d4iuc66tfcCUCUV0Tzjqr5Wucgq7tWUcuIWfIXH9JYxO59dOWD5brtZE2uBdAgyMyooNAbi7q/s1600/preview_rawgrowthrates.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiscWH4N2lKk1oeYUHceRFmGN2ev1Dgudxfhd8k4lBTwuFrxd2m1c0zqxPgcN_6fpCJtL2d4iuc66tfcCUCUV0Tzjqr5Wucgq7tWUcuIWfIXH9JYxO59dOWD5brtZE2uBdAgyMyooNAbi7q/s640/preview_rawgrowthrates.jpg" width="640" /></a></div>
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It would appear that when there is a recession, both Ontario as a whole and the Northwest experience negative growth rates. Outside of recession, Ontario as a whole sees positive employment growth rates while the Northwest seems to cycle between booms and busts. With such fluctuations, it is difficult to see what the trend might be in employment growth rates. For examples, are growth rates in our region stable over the long term or declining? For Ontario as a whole, there have been more positive than negative growth rates so that overall employment has grown over the last twenty years. For the Northwest, overall employment has declined and a quick visual inspection shows that there are probably more periods of negative employment growth than positive over the last twenty years. </div>
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To show trends I've used a simple data smoothing technique called LOWESS which allows for the regression relationship of employment growth rates on year to be demonstrated visually and which can also help take into account extreme observations known as "outliers". The plotted results basically present a long-term trend picture of employment growth rates over time. The individual plots for both the Northwest and Ontario are presented below (Figure 2). The smoothing line essentially is a calculated flexible line of best fit through the data points over time.</div>
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<b>Figure 2</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizfG_YWIR1nK8B3XUESQSW8qfbidg1BwZA7FBKLO4dsBgur6vnOyhJZ_2_alYKxONrEaV6XEMSzd2GquFpU-csph8FbgaEE95mzaJoaXFQYD5IFCJKke4sjO0x7bWuzxrJw9RKVOhc8J_a/s1600/preview_slide1-98.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizfG_YWIR1nK8B3XUESQSW8qfbidg1BwZA7FBKLO4dsBgur6vnOyhJZ_2_alYKxONrEaV6XEMSzd2GquFpU-csph8FbgaEE95mzaJoaXFQYD5IFCJKke4sjO0x7bWuzxrJw9RKVOhc8J_a/s640/preview_slide1-98.jpg" width="640" /></a></div>
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The results are also plotted together for comparison purposes (Figure 3) and show results that are both expected and surprising. First, employment growth rates in Ontario have generally been higher than for Northwestern Ontario - the one exception was during the early 1990s when Ontario as a whole actually did slightly worse. Since then, there has been a growth gap and the gap has grown over time. Second, both Ontario and the Northwest have seen declining employment growth rates over the last decade. Employment growth rates in Ontario peaked in 2000 and have since been declining though the long term shows they are still positive. For Northwestern Ontario, the peak was reached in the late 1990s and there has been decline since with average long term trend showing negative growth rates since 2002. </div>
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<b>Figure 3</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzNknAW5SznVSNYzk2Oow701FZzrvb0uOpXsuLl_IjAClVoTMCEnfkU3pxEQDZ0L0OQeLk7OAWarwdi-rZOkBCREG0cEhuyPlFOs5MNzCm1XzcZMAn5bG7G4t-bLEs6qc2e6cSV3r3lkJ7/s1600/preview_comparison.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzNknAW5SznVSNYzk2Oow701FZzrvb0uOpXsuLl_IjAClVoTMCEnfkU3pxEQDZ0L0OQeLk7OAWarwdi-rZOkBCREG0cEhuyPlFOs5MNzCm1XzcZMAn5bG7G4t-bLEs6qc2e6cSV3r3lkJ7/s640/preview_comparison.jpg" width="640" /></a></div>
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These results are fascinating because they actually show the same trend in both Ontario and the Northwest - declining employment growth rates over the last decade. The difference is that Ontario has a whole still has averaged positive albeit small growth rates whereas the Northwest has headed into negative territory. The northwest has simply been harder hit because of its employment concentration in forestry whereas Ontario as a whole has not been as affected by the manufacturing sector decline because of its greater diversification. This reinforces my view that Ontario over the last decade has been a province facing serious economic challenges. Its per capita real GDP performance has been the worst in the country and this additional evidence showing declining employment growth rates reinforces the economic challenges it faces. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_s_big_city_traffic_m/"><b>Thunder Bay's "Big City" Traffic Masterplan</b></a></div>
<ul class="ul1">
<li class="li7">Sep 26, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/city+council/"><span class="s3">city council</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/construction/"><span class="s3">construction</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/humour/"><span class="s3">humour</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/traffic/"><span class="s3">traffic</span></a></li>
</ul>
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One of the pleasures of living in Thunder Bay is that commuting to work or anywhere else for that matter is usually not very time consuming. Well, over the course of the last week in Thunder Bay, it has taken me almost 25 minutes to drive to places that customarily take only 5 minutes. Last week, a trip to the Port Arthur Health Centre from work took me twenty minutes as Oliver Road was under construction and traffic was backed up along a detour on High Street. Then today, a trip to Intercity saw bumper to bumper traffic along Memorial and Central Avenue as a chunk of Fort William Road was closed due to construction. For a City where five cars lined up to turn left constitutes traffic congestion, it was positively traumatic. It felt like being in Toronto but of course without the dining, shopping and entertainment.</div>
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Why all this construction is underway in September rather than during the summer is a question that I ask myself every year but perhaps this is all part of a master plan on the part of our City leaders to give Thunder Bay the big city cosmopolitan urban feel they crave for the promotional brochures. Step One. Encourage new commercial and institutional development on two lane roads (like Junot between Red River and the Harbour Expressway) so as to create congested traffic flow. Step Two. Encourage as much new commercial development as humanly possible away from the downtown cores and into the Intercity Area. Step Three. Wherever it appears that traffic is actually flowing, install a new set of traffic lights and make sure they are not synchronized. Step Four. Strategically time construction for the start of the school year and make sure that at least one of the key north-south routes through intercity is under construction. If it involves a bridge, so much the better. Step Five. Add confusingly marked bike lanes on as many routes as possible.</div>
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The result? Funneling ten times more vehicles than usual through a given roadway creates bumper to bumper traffic and the congestion of being in Calgary or Toronto but without the travel cost of a plane fare. As an added bonus, to all of the above can be added the quintessential Thunder Bay traffic experience - watching a freight train merrily wind its way through intercity. It is all part of the immeasurable majesty of Thunder Bay. </div>
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Why are gas prices still so high in Thunder Bay? The traffic master plan is ultimately linked to fiscal stimulus for Thunder Bay's ailing gas station sector. What better way to stimulate the economy than create traffic jams that with all that idling in traffic boosts the demand for gas, keeping prices up. Its a classic government job creation strategy.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/why_premier_mcguinty_is_not_in_t/"><b>Why Premier McGuinty is Not in Thunder Bay Today</b></a></div>
<ul class="ul1">
<li class="li7">Sep 23, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/leaders+debate/"><span class="s3">leaders debate</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mcguinty+absence/"><span class="s3">mcguinty absence</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north/"><span class="s3">north</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a></li>
</ul>
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Today is the NOMA provincial party leaders debate in Thunder Bay between Tim Hudak and Andrea Horwath. Premier McGuinty has declined to attend. The premier apparently has a previous engagement and furthermore probably believes that as the premier for all Ontario, debates should be held with the entire province rather than a single region as the stage. The outrage in the North has been palpable but in simple cost-benefit terms, if I were the premier, I would have made the same decision. I probably also would have added that the debate seemed exclusionary and elitist given that according to my last look it required a 95 dollar conference admission fee. But then what do I know, I'm an economist, not a political advisor. (By the way, the charge of elitism can be deflected by the fact the debate is being webcast on the <a href="http://www.noma.on.ca/article/provincial-leaders-debate-webcast-194.asp"><span class="s3">NOMA site</span></a>. NOMA stands for Northwestern Ontario Municipal Association. Web Coverage is also available on <a href="http://netnewsledger.com/"><span class="s3">Netnewsledger</span></a>.).</div>
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For Dalton McGuinty, coming to Northern Ontario for a regional debate is fraught with high costs and little in the way of benefits. This is a region - that usually tends to vote Liberal or NDP anyway. It generally is not an arena for rational and open debate with a reasonable chance that you can change someone's mind, but a highly partisan political herd environment. In some ridings, the tradition is to vote Liberal and when you want to punish the Liberals you vote NDP. Given the anger over what many see as a weak response to the forest sector crisis by the provincial Liberal government, the desire to publicly punish is high. Having Tim Hudak and Andrea Horwath pummel the premier on forestry job losses when they have not had that much to say about forestry policy themselves is probably not how the premier wants to spend his day.</div>
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The debate is also being held in a region that is relatively marginal compared to the vote rich GTA. It is difficult to see the premier turning down a similar chance to debate the other two leaders in Toronto on the issue of the GTA as Ontario's economic driver. The media is clustered in Toronto as are the voters. In the case of the Northern debate, not too many people in Toronto will be paying attention to the debate anyway unless he makes a major gaffe that is trumpeted in the evening newscasts. </div>
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The result of the political calculus? Coming to the Northern debate has high costs and very low benefits. Given the very small number of seats at stake particularly in the Northwest where the debate will receive the greatest coverage, he is willing to take his chances. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/resolving_ontario_s_economic_sta/"><b>Resolving Ontario's Economic Stall</b></a></div>
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<li class="li7">Sep 21, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conservative/"><span class="s3">conservative</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/liberal/"><span class="s3">liberal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ndp/"><span class="s3">ndp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy/"><span class="s3">policy</span></a></li>
</ul>
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Ontario’s economy when examined in terms of its real per capita GDP has not performed exceptionally well over the last decade. Moreover, its real per capita GDP has grown slower than that of most other provinces such that while it was 34 percent above the Canadian average in 1981, by 2009 it was only 10 percent above the average. Growth over the last decade in real per capita output has been much slower than the 1990s even if one excludes the effects of the Great Recession. Over the period 1990 to 2000, real per capita GDP in Ontario grew by 21 percent while between 2000 and 2007 (just before the Great Recession started reducing it) it only grew by 6 percent. So what are Ontario’s major political parties proposing in order to reverse this economic stall and getting Ontario to start growing again and creating jobs and output?</div>
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While there are similarities across all three of the main parties given their middle of the road political nature, in terms of economic development philosophies, the Liberals and the NDP are probably the most similar. They both see the role of the provincial government as rather dirigiste when it comes to the economy. The Liberals see economic development as flowing from direct financial incentives provided to stimulate private sector activity whether it is the green energy sector, the automobile sector, or public transit. They have coupled this with plans to continue reducing business taxes. This incidentally is the strategy that has been employed for much of the Liberal regime since 2003. However, given the weak economic growth since 2000, the claim can be made that their policy was side swiped by the Recession.</div>
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The NDP wants a buy/made in Ontario policy and will also lower some business taxes - at least for small business. They are less keen on lowering taxes for corporations unless those corporations demonstrate they are creating jobs. They are proposing a tax credit for companies that invest in buildings, machinery and equipment in Ontario. The Conservative plan for jobs and growth focuses on reducing red tape and regulation for small businesses and implementing tax reductions. Absent from the Conservative platform is direct government subsidization or major incentive programs for key industrial sectors. </div>
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Is any of this important? It is if we believe government can influence economic growth and that we may be headed for a minority government. A new seat projection by the Laurier Institute for the Study of Public Opinion and Policy indicates that if an election were held today, the Liberals would win 46 of the 107 seats in the provincial legislature while the Tories would take 41 and the NDP would get 20. This would be a Liberal minority and the question is what will economic policy for Ontario be when it comes to jobs and growth? </div>
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Would the Liberals seek an alliance or accord with the NDP and implement an HST reduction while slowing down their business tax reduction plans? An alliance with the NDP seems logical as both the Liberals and the NDP have government policy and intervention at the center of their jobs and growth strategy. However, cooperating with the NDP gives their platform additional legitimacy and it is the NDP that has been eroding the Liberal vote the most. Would the Liberals ally with Conservatives? Probably not given the greater philosophical differences. How about the Conservatives and the NDP? Both the Conservatives and the New Democrats pledge to remove the HST from some items such as energy and heating which is essentially a tax reduction but that is probably not enough to hang a formal relationship on given their divergent economic philosophies. If there is a Liberal minority, the odds are thus good they will go it along on a vote by vote basis meaning there will probably be another election very soon thereafter. It also means a period of some political instability which puts the business of getting the economy moving again on hold. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/investing_in_remote_regions__bui/"><b>Investing in Remote Regions: Building the Business Case</b></a></div>
<ul class="ul1">
<li class="li7">Sep 19, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/business/"><span class="s3">business</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/infrastructure/"><span class="s3">infrastructure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/investment/"><span class="s3">investment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/remote+communities/"><span class="s3">remote communities</span></a></li>
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Out of the<a href="http://www.chamber.ca/"><span class="s3"> Canadian Chamber of Commerce comes a new report titled ”The Business Case for Investing in Canada’s Remote Communities,” </span></a>which argues that Canadians need to start looking at remote communities somewhat differently. Despite the perception (and often the reality) that remote communities are dependent on government assistance for their survival, the new reality is that as the demand for resources rises and the international community flocks to Canadian resources in remote areas, these remote communities are wealth generators that will enhance the living standards of all Canadians. Moreover, the aboriginal population is concentrated in these areas and resource development is an important tool to improve their economic welfare. </div>
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There are of course challenges. As the report notes:</div>
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“There is no doubt that many remote communities-which are often difficult to reach, have challenging geographies, harsh climates, limited infrastructure and sparse populations – face significant challenges to their long-term social and economic sustainability.”</div>
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At the same time, the presence of natural resources in these remote regions offers an opportunity for future economic development but investment is required for these communities to take advantage of the resource opportunities. This investment need not necessarily be from government – there can be business investment in remote communities. According to this report, business investment can bring more effective, faster and less costly economic development but to build the case for business investment, these communities must have marketable products as well as a skilled workforce and capital infrastructure. Public policy is critical here in ensuring education, access to health care, transportation and communications links. The challenge in an era of deficit reduction to providing this critical infrastructure can be met according to the report by having government and business build partnerships. For example, federal and provincial infrastructure projects should consider the commercial benefits of location when considering their human capital and infrastructure investments in remote areas. Their spending should be seen as an investment rather than a subsidy particularly if linked to the exploitation of market opportunities by the private sector. The report goes on to make a number of recommendations – first of which is for the federal government to review and improve the funding formula for aboriginal education to ensure parity with the provincial funding model in each province. Education for First Nations is critical given their young demographic profile and their concentration in remote resource areas.</div>
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This report is of course advocacy for Canada’s remote communities but it makes an important point. Canada has a vast geography with a wealth of natural resources that are in growing demand but to access and harvest and process those resources, people do need to live in remote areas. It is bad for business to have remote communities without adequate transport or broadband links, poor schools and hazardous drinking water. About 15 percent of Canadians still live in areas considered rural/remote – nearly five million people. Five million is a lot of people to have treated as second-class citizens, particularly given they are indispensable when it comes opportunities on Canada’s resource frontier.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_twitter_election_update/"><b>Ontario Twitter Election Update</b></a></div>
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<li class="li7">Sep 18, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/predictions/"><span class="s3">predictions</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s3">twitter</span></a></li>
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It has now been almost two weeks since the Ontario election was called and during that time the number of Twitter followers the four party leaders have has started to grow at a faster rate but the overall rankings have not shifted since I began keeping track on June 30th. Currently, Tim Hudak has 10,671 followers (up from 7,889 on June 30th), Andrea Horwath has 6,930 (up from 4,518), Dalton McGuinty has 15,356 (up from 11,477) and Mike Schreiner has 2034 (up from 1,286). </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHwe_sk1Ong9ADRo0gKSTfefg0kIpoNxD1zeYTyYITV9n_ySN15yf4GZaTstihkbkMePA5JZ97JNUT32IewXbGhGkLOURECYxU5NidWEgAvQcry4lxYlKm7te58ng9_FZvnM9fR-G8VT0s/s1600/preview_slide1-95.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHwe_sk1Ong9ADRo0gKSTfefg0kIpoNxD1zeYTyYITV9n_ySN15yf4GZaTstihkbkMePA5JZ97JNUT32IewXbGhGkLOURECYxU5NidWEgAvQcry4lxYlKm7te58ng9_FZvnM9fR-G8VT0s/s640/preview_slide1-95.jpg" width="640" /></a></div>
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What has changed a bit is the distribution since the end of the summer. Andrea Horwath has increased her share of Twitter followers from 18 to 20 percent. Essentially, her followers have grown at a faster rate than any of the other three leaders. Since June 30th, Tim Hudak's share has declined from 31 to 30 percent and Dalton McGuinty's share has declined from 45 to 44 percent while Mike Schreiner's share has remained fixed at 6 percent. Much of this distributional change has occurred since the end of August and may be a reflection of the "Orange wave" that so many have remarked about. If the seats in the legislature broke up along the lines of the Twitter distribution, you would have 47 Liberals, 21 NDP and 32 Conservative and 6 Greens - a minority Liberal government. However, based on Twitter counts, the overall picture still seems the same. Moreover, electoral ridings are first past the post meaning it is unlikely any Greens will be elected.This of course is in marked contrast to some of the poll results which have picked up some remarkably varying results.</div>
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It is interesting to note that the <a href="http://www.electionprediction.org/2011_on/index.php"><span class="s3">Ontario Election Prediction Project</span></a> web site currently has the following prediction of the 107 Ontario seats: Liberals 18, Conservatives 29, New Democrats 15 and 45 too close to call. If the too close to call seats break along the others, you would be looking at a minority Conservative government. In terms of Northwestern Ontario ridings, it predicts Thunder-Bay Atikokan as going NDP, Kenora-Rainy River as going NDP and Thunder Bay-Superior North as too close to call. For the 11 northern Ontario riding as a whole, 5 are currently predicted to go NDP, 2 Conservative, 1 Liberal and 3 are too close to call. There are still almost three weeks to go. Its going to be exciting. My call right now is for a minority provincial government.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_ottawa/"><b>Northern Economist in the Ottawa Citizen</b></a></div>
<ul class="ul1">
<li class="li7">Sep 18, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conservatives/"><span class="s3">conservatives</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/liberals/"><span class="s3">liberals</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ndp/"><span class="s3">ndp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a></li>
</ul>
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<b>The small matter of a huge debt</b></div>
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Livio Di Matteo, Ottawa Citizen, September 16, 2011</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfZbDIO2E6txloOFUqKtVD6C-ByukowqGgKGJ4SLspiG27e7eIJ5TeU5IQUMA9rSWI6XpJcSN3AdpvRpPrOmtp2Gup-0VBAkt6NA7ZK06yu6cu3LjqJWFzIkN1rgXZ8VwcxeNeWjbX31bw/s1600/preview_5412968.jpg" imageanchor="1"><img border="0" height="412" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfZbDIO2E6txloOFUqKtVD6C-ByukowqGgKGJ4SLspiG27e7eIJ5TeU5IQUMA9rSWI6XpJcSN3AdpvRpPrOmtp2Gup-0VBAkt6NA7ZK06yu6cu3LjqJWFzIkN1rgXZ8VwcxeNeWjbX31bw/s640/preview_5412968.jpg" width="640" /></a></div>
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<b>Ontario Finance Minister Dwight Duncan delivers the budget in March. Whatever party forms the government after Oct. 6, expect larger debt and debt-service costs, says Livio Di Matteo.</b></div>
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<b>Photograph by: Mark Blinch, REUTERS</b></div>
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The most pressing issue for this fall's Ontario provincial election is the precarious state of the province's public finances, with a deficit according to the last provincial budget of $16.7 billion in 2010/11 but now revised to only $14 billion. Needless to say, with these kinds of deficits, the net public debt will soon break the $250-billion mark and generate debt-service costs that will eat into program spending. According to the Public Accounts, we are now spending $9.5 billion a year on servicing the provincial debt.</div>
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To fix Ontario's public finances, what must be addressed is the balance between revenues and expenditures. Over the period 2001-2011, total expenditures grew at an average annual rate of 6.2 per cent and revenues at an average annual rate of 4.7 per cent - an unsustainable trend. Starting from expenditures of $120.7 billion and revenues of $106.7 billion and projecting forward at these growth rates, by 2015/16 expenditures would be about $154 billion dollars and revenues $128 billion - a deficit of $26 billion. Clearly, the expenditure growth rate needs to fall or the revenue growth rate needs to rise or some combination thereof.</div>
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What might the deficit look like depending on the election outcome? Based on information in their platform cost document, medium-term revenues and expenditures projections under the Liberal plan amount to average annual revenue growth of about 4.5 per cent and average annual total expenditure growth of about 2.3 per cent. The gap between revenue and expenditure growth rates is substantial at 2.2 per cent. The provincial Liberal plan is to eliminate the deficit by 2017/18 and their projections do lower the growth rate of expenditures such that the budget would balance by then. However, by the time it balances, about another $70 billion will be added to the province's debt and that assumes there is not another recession.</div>
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As for the Progressive Conservatives, they have proposed cutting Ontario government spending by about two per cent a year on programs outside of health and education until the budget is balanced by about 2017/18. This will also be accompanied by some new spending and some tax relief. When one looks at the revenue and expenditure projections provided in the Changebook backgrounder, expenditures will rise at an annual average rate of 1.7 per cent while revenues are expected to rise at a rate of 4.2 per cent - a gap of 2.5 per cent. This plan, if successfully implemented, would also eliminate the deficit by 2017, but will add about another $60 billion to the debt by then.</div>
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The New Democrats do not yet provide a detailed forecast of how their plan will affect future provincial revenues and expenditures and ultimately the deficit. Their main plank is fiscally faith-based with a graph showing that since 1980/81, when one looks at the percentage of deficits incurred by all Canadian federal and provincial governments, New Democratic governments have run the fewest. They do however provide a tally of their savings and revenues and their expenditure priorities, which, using the 2010/11 revenue and expenditure figures as a base, amounts to an additional average annual increase of two per cent to revenues and a 1.4-per-cent increase to expenditures. Thus, they do plan to add to their revenues faster than their expenditures, but if the gap is indeed only 0.6 per cent it will take a very long time for the deficit to disappear. The New Democrats must provide more information on how they would deal with the deficit.</div>
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These plans of course are at best forecasts and subject to changing economic conditions and political circumstance. The best long-term debt and deficit fighter is of course robust economic growth and Ontario's economy is facing chronic productivity and growth challenges. However, at this point, if one is to take these plans at their word, one can make the following conclusions.</div>
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First, the Liberal and Conservative plans would both eliminate the deficit by about 2017 but under the Liberals, revenues and expenditures as well as the debt would all be higher. In some sense, they have put forth a higher-cost plan to eliminate the deficit. However, given evolving circumstances over the span of time, the differences between the two plans may not turn out to be that much different.</div>
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Second, the New Democrats have really yet to put forth a credible plan on how to deal with the public finances, but the indications to date suggest they are prepared to take an even longer time horizon to deal with the deficit.</div>
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Third, whatever party forms the government after Oct. 6, be prepared for a much larger debt and debt-service costs.</div>
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<br /></div>
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<b>Livio Di Matteo </b>is professor of economics at Lakehead University and a contributor to Worthwhile Canadian Initiative, Canada's premier economics blog (<a href="http://www.worthwhile.typepad.com/"><span class="s3">worthwhile.typepad.com</span></a>).</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_financ/"><b>Northern Economist in the Financial Post</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Sep 16, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/bob+rae/"><span class="s3">bob rae</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/dalton+mcguinty/"><span class="s3">dalton mcguinty</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+policy/"><span class="s3">fiscal policy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fp+comment/"><span class="s3">fp comment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mike+harris/"><span class="s3">mike harris</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxation/"><span class="s3">taxation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tim+hudak/"><span class="s3">tim hudak</span></a></span></li>
</ul>
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<b>In Ontario, everyone’s a taxman</b></div>
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Sep 14, 2011 – Special to the Financial Post</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgftK0YiUV94Di4OI8R-8KvBXUbpZi0N2Q5s5tTm6Olunl9RgLeG9iUcA2AmzgwTOEvXWj4TlwgK_Dy25MvgoVniLd7xqIjDyU8SkfOqkY-OsA_0ddKamsPD8u7Ym42VS-VbzMzuRvOQPGT/s1600/fe0915-ontario-tax-champs-e.jpg" imageanchor="1"><img border="0" height="298" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgftK0YiUV94Di4OI8R-8KvBXUbpZi0N2Q5s5tTm6Olunl9RgLeG9iUcA2AmzgwTOEvXWj4TlwgK_Dy25MvgoVniLd7xqIjDyU8SkfOqkY-OsA_0ddKamsPD8u7Ym42VS-VbzMzuRvOQPGT/s400/fe0915-ontario-tax-champs-e.jpg" width="400" /></a></div>
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<b>Ontario’s political culture has hiked taxation, whatever party is in power</b></div>
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<b>By Livio Di Matteo</b></div>
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Is Ontario Premier Dalton McGuinty “The Taxman,” as Progressive Conservative leader Tim Hudak has been claiming in his bid to become the next premier of Ontario? Hudak has pointed to Ontario’s Health Care Premium and the eco-fee fiasco, as well as the HST. This begs the following question: Has the McGuinty government raised Ontario’s tax burden? Is he “The Taxman”?</div>
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As always, public finance issues, especially with respect to taxation, are complex. But data from the federal Fiscal Reference Tables can be used to shed some light on this question.</div>
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However, rather than taxes, the term “own-source revenue” is probably a better descriptor because the Ontario provincial government raises revenue not just from income and sales taxes, but also from assorted fees, gambling revenues, liquor sales and natural resource rents. These, in essence, all represent a transfer from the private to the public sector and thus constitute “taxation.” In addition, one needs to look at these revenues not in absolute values but in inflation-adjusted dollars per capita, as well as a share of the province’s output.</div>
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Real per-capita own-source Ontario provincial government revenue (in 1997 dollars) rose from $3,261 per person in 1986-87 to $4,116 by 2009-10. It is, of course, subject to ebbs and flows as a result of business-cycle fluctuations and has dropped substantially over the last couple of years, due to the recession. However, it peaked in 2007-08, during Premier McGuinty’s tenure, at $5,052.</div>
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Yet, one also needs to be aware that it has trended upward over a time span that includes the governments of David Peterson, Bob Rae, Mike Harris and Ernie Eves, as well as Dalton McGuinty. All of these premiers saw years with some substantial increases in real per-capita own-source revenues, as well as years with declines. These declines were mainly due to economic slowdowns rather than explicit tax relief, especially during the Rae era. Meanwhile, the increases in own-source revenue, particularly in the Harris years, were also a function of the expanding tax base due to a booming economy.</div>
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The ratio of own-source revenue to GDP represents the burden of revenue raising on the economy as a whole and probably better reflects business-cycle fluctuations, as both GDP and government revenues move in conjunction with the business cycle. Here, the trend is also upward over time. Whereas in 1986-87 provincial own-source revenues accounted for 10.5% of the province’s GDP, by 2009-10 it had climbed to 12.7%. This ratio also peaks just before the recession in 2007-08, during Premier McGuinty’s tenure, at 14.8%. During the recent recession, Ontario government own-source revenues have actually plummeted even faster than GDP.</div>
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On the face of it, the McGuinty government is associated with some of the highest values of both real per-capita own-source government revenues and the share of GDP accounted for by those revenues. Does that make Mr. McGuinty the taxman? It does for the time being, but history suggests the title can be a fleeting one. Average annual real per-capita own-source revenues were $3,605 under David Peterson, $3,535 under Bob Rae, $4,398 under Mike Harris/Ernie Eves and $4,663 under Dalton McGuinty.</div>
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The average value of the own-source revenue to GDP ratio was 11.7% under David Peterson, 12.1% under Bob Rae, 12.9% during the Harris-Eves era and 13.6% during the McGuinty era. The trend toward greater taxation and revenue appropriation by Ontario’s government is not a recent phenomenon but an upward trend over the last 20 years, no matter who has been in power.</div>
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Dalton McGuinty has indeed presided over an era where the provincial own-source revenue to GDP ratio has reached its greatest height, but he has been able to do so by building on the work of his predecessors. Ontario’s politicians have all been part of a provincial political culture that has expanded the role of government and supported it with ever-greater tax revenues. They have all been “taxmen.”</div>
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Financial Post<br />
Livio Di Matteo is professor of economics at Lakehead University.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/setting_jim_stanford_straight/"><b>Setting Jim Stanford Straight</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Sep 14, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/ccpa/"><span class="s3">ccpa</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/jim+stanford/"><span class="s3">jim stanford</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+per+capita+gdp/"><span class="s3">real per capita gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tim+hudak%27s+geometry/"><span class="s3">tim hudak's geometry</span></a></span></li>
</ul>
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Jim Stanford has just published a commentary on the Ontario Conservative Party's Changebook in which he criticizes the graphs and statistics used. In his Graphs for Dummies: The Troubled Geometry of Tim Hudak’s changebook he argues that there is a misleading pattern of visual presentation in those graphs. One criticized graph in particular caught my attention – the one on the change in real per capita GDP for Canada’s provinces between 2000 and 2010 – because it was my graph. I only realized something might be up when I got a call from a Radio-Canada reporter asking about the graph prompting me to do a web search. According to the news release on Canada Newswire issued by the Canadian Centre for Policy Alternatives:</div>
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“One graph presents statistical claims that are calculated from outdated forecasts (rather than actual data), without indicating this to readers; when actual (rather than forecast) data is used, the graph's conclusion is reversed completely.” </div>
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Reading the actual report, the account is a bit more nuanced and the criticisms are more directed at the Conservative Party’s use of the graph than my work personally (he did not accuse me of drawing cartoons) but nonetheless I think it is important to direct some points back to Mr. Stanford.</div>
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I should provide some background. I was invited to present at pre-budget submission hearings at Queen’s Park last January (by Norm Miller, a Conservative MPP) and presented on January 31<span class="s4"><sup>st</sup></span>. I put together some power point slides on Ontario’s economy and fiscal situation using data from Statistics Canada and the Ontario government (acknowledged on the third slide) to support my talk. The slides are available on my Economics Department web page. </div>
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The slide showing that Ontario fared the worst among the ten provinces in real per capita GDP growth between 2000 and 2010 eventually found its way into Tim Hudak’s Changebook. I suppose it would have been nice to have been given notice my work was being used in a political document but on the other hand my presentation was a public document and no one asks me when they cite my other publications. By the same token, it would also have been courteous for Mr. Stanford to send me a copy of his critique once released given the kind provision of my time to him answering his questions rather than having to hear it second hand via the media. It would appear that a lack of common courtesy crosses political affiliations.</div>
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Contrary to Mr. Stanford’s statement, there was no “report” but only a set of slides used to support a verbal presentation. The GDP, population and price index numbers (with 1997 as the base year) I used for the specific graph mentioned were from a specific data set maintained by the Canadian Institute for Health Information which obtains its price and GDP numbers from Statistics Canada. The GDP numbers for 2009 and 2010 were forecasts but then everyone who uses provincial GDP numbers knows that given lags the end points are forecasts subject to revisions. Contrary to what the CCPA press release would have you believe, they are “actual data” and at the time used they were not “outdated” forecasts. Indeed, everyone who uses provincial GDP numbers knows that the provincial GDP numbers are subject to frequent revision and even the numbers that Mr. Stanford uses in his revised calculations will probably be revised several years down the road. Should he eventually be accused of not using actual data? Mr. Stanford also argues the price deflator used was inappropriate because it was not chained $2002 dollars. It was still a legitimate price deflator and so what if the base year was 1997?</div>
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Mr. Stanford then calculates his own numbers using the revised data but uses the period 1999 to 2009 and lo and behold, Ontario now sees positive real per capita GDP growth of 4.4 percent over a 10-year period – still the lowest in the country and practically flat when spread over 10 years. This was of course the point of my presentation, that Ontario faced serious productivity and economic problems and had fared the worst in terms of per capita income performance during the stagnant first decade of the 21<span class="s4"><sup>st</sup></span> century. So we now have different numbers, but the same relative performance. In addition, Mr. Stanford mentions that he has recalculated the series using actual 10-year trends but offers no details on how exactly how those trends were estimated.</div>
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So I’ve also gone off and collected revised Statistics Canada real GDP numbers in 2002 constant prices for the period 1990 to 2009 and drawn my own revised graph for the 2000 to 2009 period (See Figure below). I’ve included the data series from Statistics Canada that were used at the bottom of this post in case Mr. Stanford wishes to cite them all on his next power point presentation. The results are now different particularly for New Brunswick, Newfoundland and Alberta. Newfoundland and Alberta now see much lower growth rates than before while New Bunswick is now much higher. That is the result of the revisions. A serious policy issue is what can be done to address these types of fluctuations in official data sources? </div>
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What about Ontario? Well, rather than eight percent negative growth it is now only minus two percent and still the worst performance in the country. Ontario’s performance is indeed removed from that of the rest of the country – it is poor. Its negative whether you calculate it from 2000 to 2009, 2001 to 2009, 2002 to 2009 or 2003 to 2009 ranging from -1.4 to -2.9 percent. (I get 2.7 rather than 4.4 when I do it from 1999 to 2009). So why exactly should these results be characterized as a dishonest presentation? However, I can only speak for my own work and the graph that I did. How flawed and over the top is Mr. Stanford’s analysis of all the other graphs? By the way Mr. Stanford, a minor point but my last name should be spelled “Di Matteo” rather than "di Matteo".</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6USeV9XeewmI-LUXxhYhOB8_jtJ93w05MXsC13rhKtnz7cu9FZG0P9zfZkKkmxV9r17zZz5UH64TSC1HkafP10iIo43z7UkwHj8SfzueYtEZavHd4zY2ZETmgWJaNKdnAG9IXs-9MCIQ5/s1600/slide1-94.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6USeV9XeewmI-LUXxhYhOB8_jtJ93w05MXsC13rhKtnz7cu9FZG0P9zfZkKkmxV9r17zZz5UH64TSC1HkafP10iIo43z7UkwHj8SfzueYtEZavHd4zY2ZETmgWJaNKdnAG9IXs-9MCIQ5/s640/slide1-94.jpg" width="640" /></a></div>
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Data Source:</div>
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GDP</div>
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v41975039 Newfoundland and Labrador; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975081 Prince Edward Island; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975123 Nova Scotia; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975165 New Brunswick; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975207 Quebec; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975249 Ontario; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975291 Manitoba; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975333 Saskatchewan; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975375 Alberta; 2002 constant prices; Gross domestic product (GDP)</div>
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v41975417 British Columbia; 2002 constant prices; Gross domestic product (GDP)</div>
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Population Series</div>
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v466983 Newfoundland and Labrador; Both sexes; All ages (Persons)</div>
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v467298 Prince Edward Island; Both sexes; All ages (Persons)</div>
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v467613 Nova Scotia; Both sexes; All ages (Persons)</div>
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v467928 New Brunswick; Both sexes; All ages (Persons)</div>
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v468243 Quebec; Both sexes; All ages (Persons)</div>
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v468558 Ontario; Both sexes; All ages (Persons)</div>
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v468873 Manitoba; Both sexes; All ages (Persons)</div>
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v469188 Saskatchewan; Both sexes; All ages (Persons)</div>
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v469503 Alberta; Both sexes; All ages (Persons)</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_winnip/"><b>Northern Economist in the Winnipeg Free Press</b></a></div>
<ul class="ul1">
<li class="li9">Sep 13, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s3">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/"><span class="s3">gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba/"><span class="s3">manitoba</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/"><span class="s3">provinces</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ranking/"><span class="s3">ranking</span></a></li>
</ul>
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<b>Manitoba in the muddled middle</b></div>
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Winnipeg Free Press, September 10, 2011, Winnipeg, Manitoba</div>
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by Livio Di Matteo</div>
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Autumn traditionally sees birds fly south, but this year voters will also be flocking to the polls in five of Canada's provinces. October will see provincial elections in Manitoba, Ontario, Prince Edward Island, and Newfoundland and Labrador. Then come November, Saskatchewan will follow.</div>
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While each province has its own unique political culture and issues, one common denominator will be the state of the economy and how their province has done compared with other provinces. Here are some simple indicators for the first decade of the 21st century.</div>
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First, consider average monthly employment growth. Over the period from 2000 to 2010, despite the recession, all provinces saw an expansion in employment.</div>
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A comparative ranking puts Alberta at the top of the heap with overall employment growth of 27 per cent -- even with the effects of the recession. British Columbia and Quebec were next at 17 per cent and 15 per cent respectively followed by hard-pressed Ontario, which nevertheless saw its employment grow by 14 per cent.</div>
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Manitoba ranked sixth at 12 per cent employment growth -- just behind P.E.I. -- followed by Newfoundland, Nova Scotia and finally New Brunswick, which saw its employment level only grow by an anemic seven per cent.</div>
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Next, consider the growth in real GDP. Here the results put the three resource-producing provinces on top -- Newfoundland and Labrador saw its real output grow an amazing 40 per cent, followed by 27 per cent growth in Alberta and 21 per cent growth in Saskatchewan. British Columbia and Quebec are next followed by Manitoba in at sixth place with a 10 per cent increase in real GDP. Then come P.E.I., Nova Scotia and Ontario. Ontario comes in second last at only four per cent -- but ahead of New Brunswick, which saw its real GDP shrink by about four per cent.</div>
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If one sums the growth rate in employment and the growth rate of real GDP and ranks the provinces from highest to lowest and then sets the highest-ranking province at a score of 100, then one gets a neat little comparative index of provincial growth prosperity over the course of the early 21st century. Alberta ranks first at a score of 100 followed by Newfoundland and Labrador at 92 and then a long drop to British Columbia in third place with a score of 60.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3UQiXYRRaj0HOzLd1TJuKc890l-mCDLQkyB3Bd4pNMBJNDnHhs3If907FHmUdaPgGTlkA6m1xsHzkfUfnWMrJ6q5JdHHTrSlu5DxP9ShHdF54lD06Vtu06_UmFaTiS3ze2FjJiQLaVJ5p/s1600/slide1-93.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3UQiXYRRaj0HOzLd1TJuKc890l-mCDLQkyB3Bd4pNMBJNDnHhs3If907FHmUdaPgGTlkA6m1xsHzkfUfnWMrJ6q5JdHHTrSlu5DxP9ShHdF54lD06Vtu06_UmFaTiS3ze2FjJiQLaVJ5p/s640/slide1-93.jpg" width="640" /></a></div>
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Saskatchewan and Quebec are close behind with scores of 58 and 50 respectively and then Manitoba -- again in sixth place -- with a score of 40. Prince Edward Island follows with 38, Ontario is next tied with Nova Scotia at 32 and finally New Brunswick ends it off with a score of seven.</div>
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Saskatchewan and British Columbia are in the top half of the prosperity index and that should bode well for their governing parties though the HST issue dogging British Columbia means any talk of an early fall 2011 election has ended.</div>
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Newfoundland and Labrador does well in this prosperity index but its high rank results mainly from GDP rather than employment growth. This may be an issue if the electorate feels the benefits of growth and prosperity have not translated into enough jobs.</div>
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As for Prince Edward Island, it will be able to boast it is doing better than Nova Scotia and New Brunswick as well as Ontario.</div>
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As for Ontario, its performance over the course of the decade has generally been dismal putting it in the same league as New Brunswick and Nova Scotia.</div>
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It is no coincidence the same decade also saw Ontario start receiving equalization payments. Ontario is afflicted by productivity problems as it managed to increase employment faster than real GDP. Ontario voters are used to seeing themselves as the economic engine of Confederation and their diminished status will leave them looking for policies that promise to restore their imperial grandeur.</div>
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Manitobans will be in a bit of a dilemma when it comes to making their political choices. Manitoba is almost in the middle of these rankings -- the proverbial Goldilocks province with an economy that seems never too hot nor too cold.</div>
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Manitobans can look west and lament they lag Saskatchewan and Alberta or they can look east and thank their lucky stars they are not Ontario or New Brunswick. Manitobans can rationalize their performance with respect to their western neighbours by noting there is no oil or potash driving their economy.</div>
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As for their eastern neighbours, they should not get too smug. Over the period 2000 to 2010, Manitoba's real GDP did not manage to grow that much faster than either P.E.I. or Nova Scotia. Like Ontario, Manitoba also faces some economic productivity issues.</div>
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Livio Di Matteo is professor of economics at Lakehead University. He is also a contributor to the economics blog Worthwhile Canadian Initiative.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/what_keeps_flaherty___carney_up_/"><b>What Keeps Flaherty & Carney Up at Night?</b></a></div>
<ul class="ul1">
<li class="li9">Sep 13, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: none</li>
</ul>
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One word - recession. The Canadian economy may be teetering on the edge of recession and a number of reports today paint an ominous picture. First, there was the report by Bank of Nova Scotia economists that Canada may be the first to stumble into recession this year. Second, there was the national balance sheet report by Statistics Canada which shows that per capita household net worth has declined. A recession brought on by declining business investment and falling exports coupled with the wealth effects of declining net worth are enough to keep the bravest central banker or finance minister up at night. Wealth effects from a collapsing real estate and stock market are what have contributed to the severity of the U.S. recession and stagnant recovery since 2008. Read about it in my latest posting at <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/09/net-worth-wealth-effects-and-recessions.html#more"><span class="s3">Worthwhile Canadian Initiative.</span></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/deficit_forecasting/"><b>Deficit Forecasting</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Sep 12, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conservative/"><span class="s3">conservative</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s3">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/expenditure/"><span class="s3">expenditure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/forecast/"><span class="s3">forecast</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/liberal/"><span class="s3">liberal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenues/"><span class="s3">revenues</span></a></span></li>
</ul>
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Ontario's provincial parties have released their platforms and budget costing and fiscal forecasting is part of the package at least for the Conservatives and the Liberals. The NDP do not yet have a detailed projection of what they might anticipate revenues and expenditures to be like if they form the government though I'm not sure they will be providing one given their platform stresses that their fiscal competence should be measured by the fact that across Canada, New Democratic governments have been the least likely to run deficits. It is an odd argument, requiring one to accept that they will be fiscally responsible on faith alone. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjXV1N71JCTWxNmlaI5H44d2V4z87mmIYViDpaLsriBnYKICFYCOEK1Ldv8ycz7eBwTDHPGedH5ZUQqN2M74vevzk1v28oB0OVCcgCRIdJCS1NljMouLLlS4gkj1qq-s4Mm2Rdqaydo0yI/s1600/slide1-90.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjXV1N71JCTWxNmlaI5H44d2V4z87mmIYViDpaLsriBnYKICFYCOEK1Ldv8ycz7eBwTDHPGedH5ZUQqN2M74vevzk1v28oB0OVCcgCRIdJCS1NljMouLLlS4gkj1qq-s4Mm2Rdqaydo0yI/s640/slide1-90.jpg" width="640" /></a></div>
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As for the Liberal and Conservative plans, the accompanying figures are from the Liberal Platform costing document and the Changebook Backgrounder and they show remarkably similar trajectories for revenues and expenditures that will balance the Ontario budget by 2017. A difference is that Liberal revenues and expenditures are generally both a bit higher than the Conservative projections. This could be due to the so-called "hole" that the Liberals have referred the Conservatives as having in their projections but it could also be the result of a more optimistic view of future revenues and spending on the part of the governing Liberals. In the end, they both seem to get to the same place but the Liberals spend and tax a bit more to get there. Its not really a big difference and both forecasts will be quite sensitive to what happens to economic growth over the next decade. Another severe recession should be enough to put both sets of forecasts out of kilter.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinb0T4zvutuvnBHGHzK6qDY8Oozf-9jQoLoc-EKx6k3J0M7DrFZ7Cj1BHTBc4h6vPpLzkcRH3iTdcXzcoY9ildTMcAdFAyX12REZIQJUzqIXRmoHMEGcdHjBQqIUHrBj09iKGtXEVOGvTv/s1600/slide1-91.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinb0T4zvutuvnBHGHzK6qDY8Oozf-9jQoLoc-EKx6k3J0M7DrFZ7Cj1BHTBc4h6vPpLzkcRH3iTdcXzcoY9ildTMcAdFAyX12REZIQJUzqIXRmoHMEGcdHjBQqIUHrBj09iKGtXEVOGvTv/s320/slide1-91.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario%E2%80%99s_provincial_election_/"><b>Ontario’s Provincial Election and the North: What Is the Issue?</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Sep 9, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/devolution/"><span class="s3">devolution</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/issues/"><span class="s3">issues</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provincial+election/"><span class="s3">provincial election</span></a></span></li>
</ul>
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As the provincial election campaign begins, undoubtedly the need to articulate northern issues will be an important one. The conventional wisdom would probably argue that the most important issues are jobs and the economy, followed by health care. A glance at the “northern platforms” of the three parties certainly would suggest that the economy is an important focus and there are indeed some similarities across the three main parties when it comes to the economy. </div>
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The New Democratic Party argues the North has been ignored by the provincial government and is pledging “respect for the North. ” Its northern policy wants to hire more doctors for under-serviced communities, remove the HST from home heating and electric bills, cap gas prices, create a Northern Ontario legislative committee to address Northern issues and change laws so mining companies must process their raw materials in the province (incidentally, something similar was done a long time ago in Ontario for logs harvested on Crown lands under the rubric of the Manufacturing Condition). The NDP is also promising to repeal the Far North Act. Aspects of the NDP platform are quite similar to what the Conservatives are proposing with respect to the removal of the HST and the repeal of the Far North Act. However, one suspects the Conservative pledge to scrap the Far North Act is probably more robust than the New Democrat’s. As well, both the Conservatives and the NDP have proposed various resource revenue retention schemes for the region, which are attractive given the anticipated mining development in the Ring of Fire.</div>
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As for the Liberals, their northern Ontario election platform is really summarized by the Northern Growth Plan which to date has promised a Northern Policy Institute (which has yet to appear but there are still weeks to go in the election campaign which may generate another promise) as well as endless future consultations and planning sessions. No doubt, the legislative committee to address northern issues proposed by the NDP will find itself quite at home with this aspect of the Growth Plan. The more practical aspects of the Liberal northern policy involves announcements of government dollars for construction, roads and health care facilities and millions of dollars have been dispensed in the run up to the election. When it comes to short-term cash dispensation, the Liberals are certainly not “ignoring” the North. In a sense, the Liberals have also not ignored the North when it comes to energy legislation or the Far North Act or the reform of the mining act or forest tenure.</div>
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None of these election platform items seems particularly innovative. Indeed, the most innovative set of Northern policies ever proposed in my living memory was the Peterson government of the 1980s which set forth three planks: the Northern Ontario Heritage Fund, Northern Health Travel Grants and a program of decentralization of provincial government offices to the north. Since then, there has really not been articulated any similar set of innovative strategic and concrete initiatives for the North. And despite endless consultations, some of the more important strategic decisions made affecting the North’s long-term development have actually been done without much consultation and in the face of substantial opposition - such as the Far North Act. </div>
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All three parties have conveniently side stepped the fundamental policy question when it comes to Northern Ontario. How much responsibility should the North have when it comes to decision making in the region. This is more than a simplistic “who owns the North” or “should the North separate from Ontario” type of question. The north is part of Ontario and Ontario is owned by all of its citizens. However, it is a legitimate question to ask whether more responsibility for decision-making should be devolved to the north especially when it comes to regional economic development, energy and the land base. </div>
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The Liberals have already given their answer given their treatment of the north in the Far North Act. The Liberals believe the North should be consulted if necessary but not necessarily consulted with the ultimate decision-making power resting with Queen’s Park. Would the NDP or the Conservatives actually be any different? Would they devolve any significant decision-making powers in the economic sphere to regional northern governments or First Nations? Based on what has been revealed in the NDP platform regarding creating a “northern legislative committee” and the Conservative platform that essentially promises “a strong voice” there is nothing yet to differentiate these two parties from the Liberals when it comes to actual respect for the north. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/employment__political_regime_and/"><b>Employment, Political Regime and Ontario</b></a></div>
<ul class="ul1">
<li class="li9">Sep 8, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s3">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a></li>
</ul>
<div class="p4">
According to a recent Nanos poll conducted for the Globe and Mail, after health care, the economy/jobs is the top concern of Ontario voters. Ontario voters may be interested on how employment growth has fared in their particular neck of the woods under various political regimes. I’ve calculated from Statistics Canada data the average annual growth rate in employment for Ontario as a whole and for each Ontario economic region for three time periods: the NDP regime for the period 1990 to 1995, the Conservative era from 1995 to 2003 and the Liberal epoch from 2003 to 2011. I've included a graph with all of Ontario and its regions as well as one highlighting the North.</div>
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Of course these figures do not take into account the length of term, the state of the business cycle (for example the NDP period from 1990 to 1995 was the shortest of the three periods and more dominated by recession) or control for particular regional conditions. Yet, they do provide an average indicator of economic performance via employment growth. </div>
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For Ontario as a whole average employment growth was greatest during the period of Conservative rule from 1995 to 2003, which of course also coincided with a long and spectacular economic boom. It was, not surprisingly, lowest during the recessionary period from 1990 to 1995 – a period of NDP governance. As for the Liberal period, it saw employment growth greater than the NDP but lower than the Conservatives. This period caught the tail end of the boom era as well as the Great Recession.</div>
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What is more interesting is the regional variation. During the NDP era, though Ontario as a whole saw negative employment growth, some regions weathered the recession reasonably well – namely, Muskoka-Kawarthas, Kitchener-Waterloo-Barrie, London and Northwestern Ontario. However, vote-rich regions like Ottawa, the GTA, Hamilton Niagara and Windsor-Sarnia saw negative growth, which upon reflection may have been yet another factor in the defeat of the Rae government.</div>
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During the Conservative era, a rising tide lifted all boats in terms of employment growth rates but growth was the greatest in the GTA, Kitchener-Waterloo-Barrie, Hamilton-Niagara, Ottawa and the Muskokas. As for the Liberal period, growth is again the greatest in these regions but there was also negative employment growth in Windsor-Sarnia and the Northwest.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim8doY7m2Ji5O3WISDc7UrgquvfIJF5h76GB_VKmQ7eB2pAdtTWznbjH724cNIj8WxFLE90zCsNV_TlqeHhgIZkRMS6TnueUdHEi109lYjBUoAva3cTXSV_rV6h_J2KhIA4waCkChzTY1S/s1600/slide1-88-1.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim8doY7m2Ji5O3WISDc7UrgquvfIJF5h76GB_VKmQ7eB2pAdtTWznbjH724cNIj8WxFLE90zCsNV_TlqeHhgIZkRMS6TnueUdHEi109lYjBUoAva3cTXSV_rV6h_J2KhIA4waCkChzTY1S/s640/slide1-88-1.jpg" width="640" /></a></div>
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For the most part, whatever the regime, the Muskoka region, the GTA and Kitchener-Waterloo-Barrie has tended to do better than the provincial average when it comes to employment growth. All the other regions have generally performed more poorly. This may be more a reflection of the concentration of economic activity in central Ontario than any specific comment on the effect of political party in power on the economy. I suppose it would be even more interesting to see how these regions actually voted but it may not be as important as you think. For example, Northwestern Ontario did not elect Conservatives during the 1995-2003 period and elected mainly Liberals for the 2003 to 2011 period and yet performed much worse during the latter period. I suppose political representation is ultimately no protection from exogenous economic shocks.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgROqWOdwsc-x__CJRl6Sbft6Tc_rb4J_nTLvltJGVk2C9KXKSDczhO8LjwtpcWKO6irpuNifxBhoZOKp2xDkEwzZ-jAS-vFqYzICJSKhjy1d2PGPg0JRXT5vIhyphenhyphenih_p6qsHtDYhecPRKFC/s1600/slide1-89-1.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgROqWOdwsc-x__CJRl6Sbft6Tc_rb4J_nTLvltJGVk2C9KXKSDczhO8LjwtpcWKO6irpuNifxBhoZOKp2xDkEwzZ-jAS-vFqYzICJSKhjy1d2PGPg0JRXT5vIhyphenhyphenih_p6qsHtDYhecPRKFC/s640/slide1-89-1.jpg" width="640" /></a></div>
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The results for the North are interesting. Under the NDP and Conservative eras, the Northwest did better than the Northeast when it came to employment growth. During the Liberal government period, the Northwest has done very poorly while the Northeast has still seen employment increases on average. Compared to Ontario as a whole, in terms of employment growth, the North did more poorly than Ontario as a whole during the Conservative and Liberal regimes - it did marginally better than Ontario as a whole under the NDP regime. However, its average employment performance was best during the Conservative era. Yet, voting patterns in the North do not reflect this performance difference. Again, it would appear that in politics, the voter equation is more complicated than simple economics. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/wages_of_labour_as_a_window_on_t/"><b>Wages of Labour as a Window on the Economy</b></a></div>
<ul class="ul1">
<li class="li9">Sep 5, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/calgary/"><span class="s3">calgary</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/carpenters/"><span class="s3">carpenters</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/wages/"><span class="s3">wages</span></a></li>
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A suitable posting for Labour Day for an economist should inevitably revolve around an analysis of wages. Wages tend to go up during good economic times and their ascent should flatten out during poor economic times and sometimes even decline. This should especially be the case for labour employed in the construction which is a barometer of current investment activity. Even with unionization, wages in construction do have a sensitivity to the economic climate. </div>
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As a comparison, take a look at the basic construction union rate (dollars per hour, monthly) for carpenters in Calgary and Thunder Bay during the 40 year period 1971 to 2011 as collected and provided by Statistics Canada. In January 1971, carpenters in Thunder Bay earned $5.35 an hour compared to $4.70 in Calgary. Carpenters in Thunder Bay were earning about 14% more than their Calgary counterparts. As the accompanying figure shows, Thunder Bay carpenters earned more than their Calgary counterparts for almost the next thirty years with the gap actually widening during the late 1980s as the western oil economy went bust. In January 1990, a carpenter in Thunder Bay was earning $22.98 while in Calgary it was $18.50 - a 24 percent difference.</div>
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However, during the 1990s, the western economy began to boom again whereas Thunder Bay's economy went into decline - a decline that accelerated during the forest sector crisis. With unionization, wage rates in Thunder Bay did not fall but they rose at a much lower rate after the early 1990s. Meanwhile, wages for carpenters in Calgary began to rise at a faster rate and by 2001 had reached the Thunder Bay level and then proceeded to surpass it. As of January 2011, the basic hourly wage rate for carpenters in Thunder Bay was $32.89 while for Calgary it was $38.63. Calgary's basic carpenter wages are now about 18 percent higher than in Thunder Bay. Wages for carpenters in Calgary appear to have particularly spiked upwards since 2008 - despite the Great Recession it would seem. All in all, a fascinating long-term view of the impact of the ebbs and flows of economic activity.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northwestern_ontario_births_risi/"><b>Northwestern Ontario Births Rising</b></a></div>
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<li class="li9">Sep 2, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/births/"><span class="s3">births</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/increases/"><span class="s3">increases</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s3">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s3">population</span></a></li>
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The 20th century fertility decline that affected most western countries was also a Canadian phenomenon and even in northwestern Ontario, annual births and birth rates have fallen. Statistics Canada data on the total number of births annually show that the total number of births in Northwestern Ontario (Districts of Thunder Bay, Rainy River and Kenora) fell from 3,311 in 1996 to a low of 2,540 by 2004 - a 23 percent decline. However, since 2004 there has actually been a recovery in the number of births and they have risen from 2,540 to 2,658 - an increase of about 5 percent. While these figures provide no such insight, the aboriginal population is a factor in the recent increases. The accompanying figures show the annual number of births both for the region as a whole and then separately by district.</div>
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Over the period 1996 to 2004, the biggest drops were in Thunder Bay District and Rainy River at about 27 percent each. Kenora District only dropped by about 15 percent. Since 2004, Kenora District has also seen the biggest recovery with an increase of 9 percent followed by Thunder Bay District at just over 3 percent. Rainy River District, however, has continued to decline and the number of births shrank by almost 7 percent since 2004. Of the three districts, Kenora is the most fertile as in 2009 there were 1067 births for a population of 64,419 whereas in Thunder Bay District there were 1,379 births but for a much larger population of 149,063. In per capita terms, Kenora District has the much higher birth rate. The rise in the number of births bodes well for future population growth at least in the medium term particularly in the Kenora District. </div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/twittering_on_election_eve/">Twittering on Election Eve</a></b></div>
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<li class="li9">Sep 2, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario+election/"><span class="s3">ontario election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter+followers/"><span class="s3">twitter followers</span></a></li>
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Well, the formal Ontario provincial election campaign begins next week and on the eve of the election its time for an overview of how the four political party leaders fared over the course of the summer. I began tracking the number of Twitter followers for the four leaders on June 30th in an effort to see if their ultimate electoral performance can be predicted by their social media presence. </div>
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Dalton McGuinty is still in the lead with just over 14,000 followers for an increase of 23 percent since June 30th. Next is Tim Hudak with just over 9500 followers for an increase of 21 percent since June 30th. Next is Andrea Horwath with 5900 followers but with the greatest percentage increase since June 30th at 32 percent. Finally, Mike Schreiner has about 1700 followers for an increase of 23 percent. </div>
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As of September 2nd, I would have to say that while all four leaders have seen growth in the number of followers, the overall distribution has been relatively stable. There has been a small decline in Mike Schreiner's share of twitter followers and a small increase in Andrea Horwath's but the other two party leaders have stayed the same. The election campaign has yet to heat up. The Twitter evidence to date shows the NDP party leader showing the greatest growth but given the low base of support it has not yet translated into a much larger share of total twitter followers. Stay tuned for an update on the Twitter scores in mid-September (or sooner if something dramatic happens).</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/looking_for_the_taxman/"><b>Looking for the "Taxman"</b></a></div>
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<li class="li9">Sep 1, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenues/"><span class="s3">revenues</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxes/"><span class="s3">taxes</span></a></li>
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Well, we are just a few days from the official start of the Ontario provincial election campaign but the simmering summer pot of campaigning is starting to bubble over. The last few days have seen Progressive Conservative Leader Tim Hudak refer to Dalton McGuinty as "The Taxman" on a number of occasions. Has the McGuinty government raised the tax burden on Ontario? I've decided to use data from the Federal Fiscal Reference Tables to shed some light on this.</div>
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Well, rather than taxes, the term "own-source revenue" is probably a better description because the provincial government raises revenue not just from income and sales taxes but also from assorted fees, gambling revenues, liquor sales and natural resource rents. These all represent a transfer from the private to the public sector. </div>
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I have down below two graphs. On the left is real per capita own source provincial government revenue (in 1997 dollars) from the mid-1980s to the present. This has risen from 3,261 dollars per person in Ontario in 1986/87 to 4,116 dollars in 2009/10. It is of course subject to ebbs and flows as a result of business cycle fluctuations and has dropped substantially over the last couple of years due to the recession. However, it peaked in 2007-08 at 5,052 dollars. Overall, it has trended upward over a time span that includes the governments of David Peterson, Bob Rae, Mike Harris, Ernie Eves and Dalton McGuinty. All of these premiers saw years with substantial increases in per capita own source revenues but also some years with declines. </div>
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A better measure is on the right - the ratio of own source revenue to GDP. In a sense it represents the burden of revenue raising on the economy as a whole and probably better reflects business cycle fluctuations as both GDP and revenues move in conjunction with the business cycle. Here, the trend is also upward over time. Whereas the ratio is 0.105 (10.5 percent of GDP)in 1986/87, by 2009/10 it has climbed to 0.127 (12.7 percent). This ratio also peaks in 2007-08 at 14.8 percent. What is interesting is that the average value of this ratio was 11.7 percent under David Peterson, 12.1 percent under Bob Rae, 12.9 percent during the Harris-Eves era and 13.6 percent during the McGuinty era. The trend has been upward over the last twenty years no matter who has been in power. Dalton McGuinty has indeed presided over an era where the provincial own source revenue to GDP ratio has reached its greatest highest but he has been able to do so by standing on the shoulders of his predecessors. They have all been taxmen.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-2802854803547389342016-12-14T15:19:00.002-08:002017-05-28T05:50:32.867-07:00August 2011 Posts<div class="p1">
<b>18 Posts from August 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/is_the_dreaded_double-dip_near/"><b>Is The Dreaded Double-Dip Near?</b></a></div>
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<li class="li3">Aug 31, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/forecasts/"><span class="s2">forecasts</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/"><span class="s2">gdp</span></a></li>
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Statistics Canada has released the<a href="http://www.statcan.gc.ca/daily-quotidien/110831/dq110831a-eng.htm"><span class="s2"> Canadian economic accounts with GDP estimates for the second quarter of 2011</span></a>. Overall, real gross domestic product or GDP declined by 0.1 percent in the second quarter following a 0.9 percent increase in the previous quarter. The big driver of the drop was the decline in exports as domestic demand was up. While business investment in plant and equipment was up and consumer spending on goods and services was also up, exports declined 2.1 percent and oil and gas extraction decreased 3.6 percent (due mainly to maintenance shutdowns and Alberta wildfires). (See the accompanying figures from Statistics Canada). Businesses are piling up inventories which means that demand is slowing (or if you are an optimist they are piling things up to meet the anticipated coming boom in demand. Not likely given the tight inventory management most companies follow today). When converted to an annual rate, real GDP in the second quarter declined 0.4 percent while it was up 3.6 percent in the first quarter. </div>
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This decline in the second quarter of 2011 comes before the economic turmoil and trauma of the summer in terms of sovereign debt and the stock market drop. The burning question is whether this signals the start of another recession. If the third quarter of 2011 shows another decline then we will technically be in another recession as recessions are traditionally defined as two consecutive quarters of negative growth. What are the odds of this happening? Pretty good actually given that the big driver of the second quarter real GDP decline was the drop in exports. </div>
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Exports make up a third of our GDP and the weak performance of the American and European economies over the course of the summer does not bode well for a pick-up in exports in the third quarter. The third quarter will also be marked by a slowdown in U.S. output due to the impact of Hurricane Irene on the U.S. eastern seaboard though that might be balanced by reconstruction activity in the fourth quarter.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/spotlight_on_ontario_s_debt/"><b>Spotlight on Ontario's Debt</b></a></div>
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<li class="li3">Aug 30, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario+financing+authority/"><span class="s2">ontario financing authority</span></a></li>
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A little known agency of the Ontario government is the <a href="http://www.ofina.on.ca/main.html"><span class="s2">Ontario Financing Authority</span></a> which was created in 1993 to manage the Province's debt as well as provide financial services to Infrastructure Ontario and the Ontario Electricity Financial Corporation. The web site provides some interesting information on Ontario's debt portfolio which at present consists of 244.7 billion dollars. Of this amount about 61 percent is held as domestic bonds, 27 percent is held in international bonds and 6 percent in U.S. T-bills and commercial paper. The remainder is held as non-public debt which is debt instruments issued to public sector pension funds. One third of Ontario's debt is held internationally. While interest paid on domestically held debt recirculates income within Canada, the portion paid out to foreign bond-holders represents a leakage of income out of Ontario and Canada.</div>
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Of course, what is more important is not the absolute value of the debt per se but its relation to provincial output or GDP. Here, the OFA provides not only the net-debt to GDP ratio for the recent past and present but also forecasts into the future based on recent government projections. Net debt is the gross debt minus financial assets and while total debt is 244.7 billion dollars, net debt at last count was 238.3 billion dollars. The net debt to GDP ratio is currently at 37.1 percent - up from 26.8 in 2007-08, just before the onset of the recession and the surge in deficits. As the accompanying figure from the OFA shows, it is slated to continue rising for the next few years and is expected to peak in 2014 at 40.2 percent after which it is supposed to decline. That remains to be seen.</div>
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Naturally, this is an important issue for this year's provincial election. The deficit is currently estimated at 14 billion dollars. Interest on the debt is currently running the government 10.2 billion dollars a year. This is 10.2 billion dollars that could have been spent on education, health, roads, transit or tax relief. The plans each of the major parties have for reducing the deficit and ultimately the growth of the debt and its associated debt charges is an important issue and one that needs to receive more than passing attention. Debt charges are already absorbing 10.2 billion dollars a year and that is at relatively low interest rates. If interest rates rise, what will debt charges go up to? Interest rates are still low and Ontario is not Greece (where short term rates on bonds are now running at over 40 percent) but the era of cheap money is being delayed by quantitative easing in the United States and Europe. It is imperative for the health of the long-term public finances of Ontario that the budget issue be addressed.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/gold_prices_bubbling_away/"><b>Gold Prices Bubbling Away</b></a></div>
<ul class="ul1">
<li class="li3">Aug 28, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/booms/"><span class="s2">booms</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/financial+markets/"><span class="s2">financial markets</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gold+prices/"><span class="s2">gold prices</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/speculation/"><span class="s2">speculation</span></a></li>
</ul>
<div class="p4">
Well, I normally do not follow the price of gold or other precious metals but an email from a former student of mind has piqued my curiousity. My former student is studying medicine rather than economics but has a consuming interest in economics and markets and forwarded me a <a href="http://www.crossingwallstreet.com/archives/2010/10/a-model-to-explain-the-price-of-gold.html"><span class="s2">newsletter</span></a> on the price of gold and a "model" linking the price to real interest rates.</div>
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<br /></div>
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In essence, there is a critical value of 2 percent - if real interest rates are below this, then the price of gold will soar. The newsletter also has a reference to discussions that the price of gold may soar to $5,000 or even $10,000 an ounce - quick frankly this is all starting to sound like the Dow 30000 talk and we all know what happened to the stock market not that long after.</div>
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A link to interest rates for the price of gold is not a bad story but it is part of a bigger portfolio picture. In the wake of the tech stock crash at the end of the 1990s boom and the potential for recession, interest rates were lowered. This led to money pouring into real estate and fueled the mortgage bubble that has led to the current financial crisis. With rates still low and the returns to real estate now depressed, money poured for a while back into the stock market (with yet another crash in 2008) but this was also combined with a search for another asset - hence gold. With returns depressed on real estate and other financial assets and the market crashing again, money is now pouring into gold. </div>
<div class="p4">
To my mind, this is another speculative bubble much like the housing market and is being fueled by the search for quick speculative returns as much as any view of gold as a "safe asset" or as some type of alternate international currency. The price of gold was under 400 dollars an ounce for most of the late 1980s and 1990s and only starts its recent ascent after 2000 - coinciding with the 21st century's first decade of turmoil in stock and real estate markets. It is now pushing 1800 dollars an ounce but for how long? </div>
<div class="p4">
The rise of gold prices since 2000 reminds me of what happens to a population of fruit flies sealed in a glass aquarium with a fixed supply of food. The population explodes and population increases exponentially until the supply of sugar is exhausted and then the population collapses. Replace fruit flies with gold prices and replace food supply with cheap money and you have what I think is a nice metaphor for the current gold price story. As long as it remains cheap to borrow and other asset prices are depressed, one can expect gold prices to remain high. Is a real interest of 2 percent the critical value? Who knows. At some point, the boom will end. As we have seen to date. All booms comes to an end. The real question is not if but when which is indeed the hardest question to answer. Of course, having cycled through the stock market, real estate, then the stock market again and now gold - where will speculative investment money flow next?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_election__not_hares__mai/"><b>Ontario Election: Not Hares, Mainly Tortoises</b></a></div>
<ul class="ul1">
<li class="li3">Aug 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/commentary/"><span class="s2">commentary</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter+followers/"><span class="s2">twitter followers</span></a></li>
</ul>
<div class="p4">
With the month of September dawning, Ontario's election is about to heat up dramatically as the campaign intensifies towards the October 6th election day. At the start of the summer, polls suggested Tim Hudak's Conservatives were poised to win with an 11 point poll lead over the government McGuinty Liberals. However, the polls of recent weeks suggest that the gap has narrowed and that there is now a much tighter race with the Conservatives at 38 percent, the Liberals at 36 percent and the NDP at 23 percent. After an early forward dash as the speedy hare, the Conservatives may be about to be surpassed by the Liberal tortoise. </div>
<div class="p4">
While the last few years have been economically tumultuous for Ontario, it may not necessarily translate into a win for the Conservatives. First, despite dissatisfaction with Liberal policies and polls that say there is a desire for change, a clear alternative has not really been articulated by either major opposition party. For example, despite the rhetoric, how the parties will differ in dealing with high electricity prices and the debt and deficit will likely not be any different when push comes to shove. In the end, the three parties are fundamentally so centrist that the election becomes a personality contest which is why campaign ads often feature such nasty personal attacks devoid of policy. This lack of real alternatives in policy is probably also a reason why voter apathy has increased over time and turnouts declined. As well, there is now a Conservative government federally and Ontario voters may decide to counterbalance the federal conservatives with a different regional voice. </div>
<div class="p4">
However, the number of Twitter followers the party leaders have suggest not so much a sudden shift in voter preferences but a slow and steady increase in followers that has left the distribution fundamentally unchanged. After nearly two months of monitoring, McGuinty still has about a 45 percent share of the party leader Twitter followers followed by Tim Hudak still with 31 percent and Horwath at 18 percent with Schreiner of the Greens at about 6 percent. Growth rates of Twitter followers have differed only marginally over the last two months thus preventing any sudden shift. Between August 2nd and August 25th, Hudak's Twitter followers grew the least at 7.7 percent. The next highest was Schreiner at 9.4 percent, then McGuinty at 9.7 percent and finally Horwath at 11.4 percent. The Twitter scores do not pick up a fundamental shift in support and suggest that if anything all the candidates are all tortoises, plodding along at rates of growth not significantly different to affect their vote share over the next five weeks. Indeed, based on these Twitter scores, the McGuinty Liberals have been ahead all along with a substantial lead.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSwuAxh9KyYA-FqiveEzQWVQJGf9N54D2GucYJsafsbgXFom7SywcaTCZSB6boNfrjmFYMPI0OPjTHlmi8sQLuIjA-9iH5ynGQg_-xV7OgTeVQcAqrCLqG2ohFJvD327eboH4dR2qANug9/s1600/preview_slide1-81.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhSwuAxh9KyYA-FqiveEzQWVQJGf9N54D2GucYJsafsbgXFom7SywcaTCZSB6boNfrjmFYMPI0OPjTHlmi8sQLuIjA-9iH5ynGQg_-xV7OgTeVQcAqrCLqG2ohFJvD327eboH4dR2qANug9/s320/preview_slide1-81.jpg" width="320" /></a></div>
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<br /></div>
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If one were to forecast based on the Twitter scores, it looks like we are heading for a Liberal government again though whether it might be a majority or minority is not really possible to tell. However, based on the opinion polls, the vote is close enough that we might end up with either a Conservative or Liberal minority government. That would not be such a bad thing. A minority government forces politicians to be much more cooperative with one another and can create a more moderate and diverse government. At the same time, the quest for a majority might result in some serious work among the parties on policy that would create some policy differentiation that might be attractive and interesting to voters. At present, Ontarians may be content remaining with the devil they know but there are potential wild cards. Voter interest is still rather low at this point and the Conservative platform may spark some interest going into September if a desire for change takes hold. Then there is always the possibility of an Orange wave taking hold at the provincial level especially in the wake of the death of Jack Layton. The situation is still fluid.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_city_council__making/"><b>Thunder Bay City Council: Making Ends</b></a></div>
<ul class="ul1">
<li class="li3">Aug 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s2">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+finances/"><span class="s2">municipal finances</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/waterfront/"><span class="s2">waterfront</span></a></li>
</ul>
<div class="p4">
Summer is rapidly drawing to an end and with it the relative calm that seems to have marked Thunder Bay politics. Come September, Thunder Bay City Council will have a number of issues on its plate while the province will be in the throes of a provincial election. Summer is short in Northwestern Ontario and it is understandable that issues tend to be deferred to the autumn. One may recall the movie The Agony and the Esctacy where Pope Julius II (Rex Harrison) is continually asking Michaelangelo (Charlton Heston) as he works on the Sistine Chapel as to when he "will make an end". Come the fall, it will be worth asking City Council as to when they will make an end of a number of issues.</div>
<div class="p4">
First and foremost, the waterfront. No doubt, the waterfront has been a success in terms of employment creation for local contractors as there seems to be alot of activity with equipment constantly going back and forth and the new pavilions do appear to be nearing completion. At the same time, Phase I is 17 percent over budget and one should not be surprised if the fall reveals that there is yet another unanticipated increase in the budget for the project in light of recent water main breaks. This first phase was supposed to reach completion late in the fall of 2011 so we shall wait with bated breath to see if the project is on time if not on cost. More to the point, we are still waiting for an announcement of who the hotelier is going to be and the start of the condo projects. Construction on the hotel was supposed to start in June and the earth has not started to move yet. It would appear that the City of Thunder Bay and the hotelier have yet to consummate their relationship.</div>
<div class="p4">
Second, I am looking forward to the first financial report on the status of the city's investment in equities. As some might recall, rather than the usual assortment of bonds, t-bills and cash, City council decided to put some of the City's investments in the equities market. It was a relatively small amount relative to the total portfolio and had grown to about 6.4 million dollars by December of 2010. However, as was pointed out at the time by Councillor Pullia, this was probably not the wisest investment strategy given that markets can go up but they also inevitably go down. Given the drop in the stock market this month, it will be interesting to see how much of a hit they have taken.</div>
<div class="p4">
Third, City Council seems to have deferred two rather contentious decisions regarding neighborhood development. Unless I have somehow missed their resolution, no decision has yet been reached as to whether a mega Tim Horton's and hotel will be built in the middle of a residential neighborhood at the corner of Junot and John Street. As well, the proposed controversial cell phone tower at the foot of Regina Avenue has also been deferred into September. With respect to the proposed Tim Horton's/Hotel project, one does recall Mayor Hobbs siding with the angry residents at the town hall meeting though Councillors Ruberto and MacKinnon - who were present at the neighborhood meeting - seemed to be more opaque on whether they were for or against the project. No doubt, they may have more to say in the cooler temperatures of fall.</div>
<div class="p4">
All of these issues of course, will pale in comparison with the aftermath of the provincial election. No matter which party wins the October 6th election, there will be a 14 million dollar deficit to contend with and it is inevitable that any restructuring of the provinces finances will affect its transfers partners. That is a nice oblique way of saying that municipalities will probably see either a freeze or more likely a reduction in their grants. There will be a certain seasonality to the public finances this year as the summer fiscal largesse of the run up to the election will make an end with the freezes of autumn. Next year will likely not be as good a year for public sector construction projects in Thunder Bay.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/conference_board_glum_on_thunder/"><b>Conference Board Glum on Thunder Bay</b></a></div>
<ul class="ul1">
<li class="li3">Aug 22, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/conference+board/"><span class="s2">conference board</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
<div class="p4">
The Conference Board of Canada has issued its <a href="http://www.conferenceboard.ca/products/reports/metro_14_reports.aspx"><span class="s2">Metropolitan Outlook 2 for Summer 2011</span></a> and is rather glum on the prospects for Thunder Bay. According to the overview:</div>
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<br /></div>
<div class="p4">
<i>“Although the 0.4 per cent expansion</i></div>
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<i>posted by Thunder Bay’s economy in 2010 was</i></div>
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<i>tiny, it was nonetheless the census metropolitan</i></div>
<div class="p4">
<i>area’s first annual increase in gross domestic product</i></div>
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<i>since 2005. We expect no growth in 2011, but</i></div>
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<i>small increases in 2012 and 2013. Employment</i></div>
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<i>also registered a rare annual gain last year, rising</i></div>
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<i>0.4 per cent after dropping 4.2 per cent in 2009.</i></div>
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<i>Job counts are forecast to rise further in 2011 and</i></div>
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<i>2012. Last year’s job growth helped cut the</i></div>
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<i>unemployment rate to 6.4 per cent, although a</i></div>
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<i>falling labour force was a larger cause. But new</i></div>
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<i>labour force entrants, attracted by the improving</i></div>
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<i>job market, should push the unemployment rate</i></div>
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<i>back up to 6.8 per cent in 2011.”</i></div>
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<br /></div>
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Thunder Bay’s manufacturing sector contracted for the 10<span class="s3"><sup>th</sup></span> straight year in a row. The city’s GDP is expected to start growing marginally in 2012 after staying flat for 2011 but employment will not be any higher than it was in 2008 by 2015 according to the forecast. One positive note that was picked up was the population increases due to net in-migration. However, there was really no explanation as to why given the poor economic prospects there was an increase in migration to Thunder Bay. The one game changer that was noted for the local economy was the potential (referred to as a long shot) of acquiring service work or the smelter for the Ring of Fire chromite deposit.</div>
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So what is keeping Thunder Bay going? Well, according to the Conference Board:</div>
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<br /></div>
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<i>“Reflecting Thunder Bay’s status as a regional hub,</i></div>
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<i>the city’s non-commercial services sector, which</i></div>
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<i>includes schools and hospitals, is its largest service</i></div>
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<i>industry. This sector’s output rose 1.3 per cent</i></div>
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<i>during 2010, but is poised to advance less than</i></div>
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<i>1 per cent this year. Relevant headlines include</i></div>
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<i>$4 million in FedNor support for a cyclotron at</i></div>
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<i>the Thunder Bay Regional Health Sciences Centre.</i></div>
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<i>The cyclotron will be used to produce radioisotopes</i></div>
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<i>for molecular imaging and earlier detection of cancer.</i></div>
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<i>Meanwhile, Thunder Bay’s finance, insurance,</i></div>
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<i>and real estate sector expanded 2 per cent during</i></div>
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<i>2010, the most since 2001, with another 1.5 per</i></div>
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<i>cent rise on tap this year. The local resale market,</i></div>
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<i>surprisingly strong for such a troubled community,</i></div>
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<i>is balanced. Brisk sales have kept realtors and</i></div>
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<i>bankers busy.”</i></div>
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Again, Thunder Bay seems to be a paradox. Basically, the economy is flat but people are moving to Thunder Bay, and retail sales and housing sales are brisk. The forecast is glum but there seems to be a lot of activity that even the Conference Board has noted. It would be more useful if the Conference Board had a more penetrating analysis of what is driving Thunder Bay's economy in light of 10 straight years of manufacturing decline. If we are "such a toubled community" then why exactly is the "local resale market surprisingly strong" and why is there such a tight rental market?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/uk_retrospective/"><b>UK Retrospective</b></a></div>
<ul class="ul1">
<li class="li3">Aug 22, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/heritage/"><span class="s2">heritage</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/london/"><span class="s2">london</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/uk/"><span class="s2">uk</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban+planning/"><span class="s2">urban planning</span></a></li>
</ul>
<div class="p4">
Well, I’ve just returned from a week in the UK. There is a great deal of construction underway in London in preparation for the 2012 Olympics. Along with redevelopment of Leicester Square and Piccadilly, there is also work on a new rail station over the Thames and substantial work on redeveloping Tube lines to move the anticipated hordes that will arrive in2012. My experiences travelling about London were quite interesting and has generated some observations.</div>
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First, the population density of London is amazing. For example, the partner of one of my hosts is the Director of Public Health for a region of London just south of the Thames. She is responsible for a population of about 250,000 people in an area that measures approximately 5 miles by 9 miles in area. This is actually a less densely populated area relative to the rest of the city. Contrast that with the provision of public health services in Northwestern Ontario where approximately the same number of people is spread across an area that is the size of France. I think we who live in northwestern Ontario (as well as those who administer us in Toronto) often forget just how thinly we are spread out and the challenges of proving services to this population.</div>
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Second, there is the youthfulness of the population. The number of young people in their twenties is astounding. In the evenings, they fill up the pubs and restaurants. The streets are filled with spillover crowds sipping their beers. They do not necessarily come in from the suburbs. They have started their careers in London and live and work there generating the experience needed to move up in their careers. If someone seems a bit older they are more often than not tourists rather than residents of the city. There is a vibrant energy to the city from the large numbers of young people. Many of course are migrants from around the world. This is a global city – a "human port" where the UK interfaces with the world. Of course, life in London is probably best for the young given the grind of daily commutes and the crowded conditions. While politeness is everywhere, one senses the underlying tensions of relentless daily competition.</div>
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Finally, while there is much new construction with some very innovative architecture, a lot of effort has also been made on working with the existing buildings. As a result, London has an amazing collection of architecture dating back hundreds of years. One expression I came across referred to renovating old buildings as “recycling”. In the current age of environmental sensibilities, keeping old buildings maintained and reused is not only an investment in our heritage but also a form of urban recycling and needs to be encouraged especially in newer cities with a more fragile set of heritage buildings. Our current debate in Thunder Bay on whether or not it is worth refurbishing our own Whalen building should be a non-starter. We are not a city on the scale of London and never will be but if we want to create an interesting city for future generations we need to be more proactive in recycling our heritage buildings and converting them to new uses.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/british_tuition___canadian_unive/"><b>British Tuition & Canadian Universities</b></a></div>
<ul class="ul1">
<li class="li3">Aug 18, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/britain/"><span class="s2">britain</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recruitment/"><span class="s2">recruitment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tuition/"><span class="s2">tuition</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/universities/"><span class="s2">universities</span></a></li>
</ul>
<div class="p4">
Today is "A-level" day in the UK, the day when teenagers find out the results of their end of high school exam tests which form the basis for university admissions. The more A levels you get on your subjects, the better your chances for admission to a program of your choice. The added wrinkle this year however is that tuition fees are expected to triple from from 3,000 to 9,000 pounds. In today's Independent, there was a special university supplement that among other things explored foreign options for British students. British students have the option of going to the continent - say the Netherlands - which is close by and charges much lower tuition fees. Alot of attention was spent in the Independent on the option of going to the United States. Little mention of Canadian universities was made however. This is unfortunate. Given that there may be as many as 250,000 British students who may not be able to go to the British university of their choice for one reason or another, there is the opportunity for some substantial international student recruitment by Canadian universities who as we know want to become more international anyway. What better opportunity than this?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/public_transit_and_cities/"><b>Public Transit and Cities</b></a></div>
<ul class="ul1">
<li class="li3">Aug 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/bombardier/"><span class="s2">bombardier</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/london/"><span class="s2">london</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s2">population</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+transit/"><span class="s2">public transit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tube/"><span class="s2">tube</span></a></li>
</ul>
<div class="p4">
In Northern Ontario, we often feel inconvenienced if it takes more than ten minutes to drive across town and traffic is when there are a half a dozen cars lined up to turn left. Moreover, our population density is so low that our public transit is generally inefficient and sporadic. Without a car, you are not going anywhere fast. In London, road traffic is incessant, congested and therefore there is reliance on public transit - bus, Tube and train. Every day, not only do millions of Londoners journey across their city to work but millions also pour in by rail from suburbs and cities from around the metropolis. No wonder there was an outcry when it was announced this week that season rail passes would be going up eight percent. Londoners and other regional commuters are quite outraged and even were demonstrating at Waterloo Station this week. Then there is the Tube. It is amazingly convenient and easy to use and has been part of the London public transport scene since the Victorian era. If you miss a tube train, another comes by in minutes. The stations are marvels of engineering. The Tube however really is a tube and during peak periods it gets very crowded with commuters jammed in like sardines. It is hot and there are breakdowns and mechanical delays. In just three days here, I've experienced two. It is a system under stress and new investment is required to keep up with demand. Without the Tube, London could not function as it does. Large densely populated cities like London, unlike cities in Northern Ontario, are dependent on public transit. Given increasing urbanization, this bodes well for the future of the Bombardier plant in Thunder Bay. It should be assured decades of work in building light rapid transit systems and subway cars for markets around the world.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_uk/"><b>Northern Economist in the UK</b></a></div>
<ul class="ul1">
<li class="li3">Aug 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/london/"><span class="s2">london</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+economist/"><span class="s2">northern economist</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/uk/"><span class="s2">uk</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/wealth/"><span class="s2">wealth</span></a></li>
</ul>
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I have returned! Northern Economist is in London this week to attend a workshop titled Common Wealth? Wealth Holding and Investment in Britain and its Settler Colonies, 1850-1914. My hosts and organizers are Alastair Owens from Queen Mary University of London and David Green from King's College London and with international colleagues we will be looking at research work on wealth using probate records. Spent time touring yesterday familiarizing myself with the Tube and saw a few sights including the Eye of London. Lovely weather in London yesterday and large crowds everywhere. No evidence at all of the recent unrest in the suburban parts of the capital in Central London. The most amazing part of the experience is again as in New York, the sheer number of people and the variety of languages being spoken. Yet, lines move very quickly and efficiently and everyone is extraordinarily polite and helpful. Am looking forward to the rest of the trip. Cheers.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/traffic_up_for_thunder_bay_inter/"><b>Traffic Up for Thunder Bay International!</b></a></div>
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<li class="li3">Aug 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/2010/"><span class="s2">2010</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/air+travel/"><span class="s2">air travel</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/airport/"><span class="s2">airport</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
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Statistics Canada has just released its <a href="http://www.statcan.gc.ca/access_acces/alternative_alternatif.action?l=eng&loc=http://www.statcan.gc.ca/pub/51-203-x/51-203-x2010000-eng.pdf&t=Air%20Carrier%20Traffic%20at%20Canadian%20Airports"><span class="s2">statistics for airport travel </span></a>for 2010 and they show that passenger traffic at Thunder Bay between 2009 and 2010 is up 5.8 percent. In 2010, there were 624,072 passengers while in 2010 there were 660,485. This is on top of a decade of steady growth. Nationally, it is up 4.4 percent while for Ontario as a whole it is up 6.4 percent. On domestic travel, Thunder Bay was up 6.6 percent compared to 3.1 percent for Ontario and 1.8 percent for Canada. On trans-border travel, however, there was a sharp decline in Thunder Bay given the termination of the air link to Minneapolis. While Ontario was up 9 percent and Canada almost 8 percent, Thunder Bay was down 22.7 percent. However, Thunder Bay International Airport made up with it with other international flights - largely winter flights to warm destinations – and here it was up 33.7 percent compared to 10.7 percent for Ontario and 9.2 percent for Canada as a whole. In terms of cargo, there was also growth of 2.8 percent for Thunder Bay but this was well below the Canadian growth rate of 13.0 percent. All in all, airport use is definitely up in Thunder Bay. Hopefully, there will be a resumption of air travel links to Minneapolis in the not too distant future.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/non-residential_investment_spend/"><b>Non-Residential Investment Spending Trends in Northern Ontario</b></a></div>
<ul class="ul1">
<li class="li7"><span class="s3">Aug 10, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/non-residential+investment/"><span class="s2">non-residential investment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s2">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/trends/"><span class="s2">trends</span></a></span></li>
</ul>
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Investment spending or capital formation is a key component of GDP and one of the more volatile parts of the macro economy given that along with interest rates and the general business cycle, it is also driven by investor expectations or what Keynes referred to as “animal spirits”. Investment spending is generally divided into residential and non-residential investment with non-residential investment further divided into industrial, commercial and government/institutional investment. Regional investment spending is no less important a driver than national and the trends in non-residential investment spending in Northern Ontario as demonstrated by its two major centres – Greater Sudbury and Thunder Bay – are quite interesting.</div>
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Using seasonally adjusted, current dollar quarterly data, non-residential investment spending data was obtained for Greater Sudbury (population in 2006 of 157, 857) and Thunder Bay (population in 2006 at 122,907) from Statistics Canada for the period 1997-2011. The average quarterly value of total non-residential investment over this period was 38.9 million dollars for Sudbury and 27.2 million dollars for Thunder Bay. Sudbury’s population is 28 percent greater than Thunder Bay while its average quarterly total non-residential investment spending was 43 percent greater. This would suggest that Sudbury is the relatively more robust economy – again not a surprise given the boom in the mining sector and the forest sector downturn.</div>
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The data comparing the two cities is plotted down below for total as well as component investment spending along with linear trend lines. What is interesting is the trend over this period for total non-residential investment spending as well as its components. While both have trended upward over this period, Sudbury has demonstrated the more robust linear upward trend. When industrial investment spending is compared, Sudbury has trended upward while Thunder Bay has actually declined over the same period. Commercial investment spending trends upward in both Sudbury and Thunder Bay but again the growth trend is more pronounced in Sudbury. As for governmental and institutional investment spending, despite the recent flurry of public sector building in Thunder Bay, the overall trend in this sector is positive but barely so. Meanwhile, Sudbury again demonstrates a pronounced high growth trend.</div>
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It would appear that non-residential investment spending in Sudbury over the last decade has been firing on all three cylinders with significant positive growth trends in industrial, commercial and government/institutional investment. While Thunder Bay has seen growth in total non-residential investment spending, it is being fueled mainly by commercial sector activity with the government/institutional sector growing very slowly and the industrial sector showing decline. What is surprising is how well Thunder Bay is doing despite the forest sector downturn particularly in the area of commercial and retail investment. What is also surprising is its relatively weaker performance in the government and institutional sector compared to Sudbury. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/understanding_the_current_financ/"><b>Understanding the Current Financial Crisis</b></a></div>
<ul class="ul1">
<li class="li7"><span class="s3">Aug 9, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+crisis/"><span class="s2">economic crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/financial+markets/"><span class="s2">financial markets</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+crisis/"><span class="s2">fiscal crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recession/"><span class="s2">recession</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/stock+market/"><span class="s2">stock market</span></a></span></li>
</ul>
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The current mayhem on world stock markets and the threat of another recession invariably generate questions as to what is happening and why. Of course, what is presently occurring on world markets is linked to the mortgage loan and financial crisis of 2008 and the ensuing global recession. In essence, prior to 2008, the world economy had a big party, which involved a lot of debt financing. Not everyone was invited to the party but those that attended had a great time. The party ended, but now everyone has to help clean up – whether they attended the party or not. In simple terms, this is the crux of the matter.</div>
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In the wake of the financial crisis and the recession, government stimulus programs bought time but after three years, mountains of private debt have been augmented with mountains of public debt and the world economy has still not started growing in a manner that would assist in dealing with the debts. The U.S. economy is still mired in slower economic growth. Europe is still facing debt problems not just in Greece but also in the larger economies of Italy and Spain. Add into this the reluctance of politicians to face their debts as most recently illustrated in the U.S. debt ceiling debate and it is no wonder that world stock markets have decided that things are not so good. There is a lot of debt to unwind and it basically means that there is going to be a lot less consumption in the immediate future both publicly and privately. This was apparent before Standard and Poor’s downgraded the U.S. debt – at best their downgrade was a match that lit the highly combustible world financial situation. </div>
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Debt is a tool that enables individuals and government deal with large capital purchases or short-term fluctuations in purchasing power. Used responsibly, it allows people to buy a house, companies to finance expansions, and governments to build infrastructure. Used irresponsibly, it becomes a way to fuel current consumption and short term growth and postpone the day of reckoning which when it arrives can be quite brutal if the economy has slowed or interest rates are rising. Part of the solution to the current situation requires governments and individuals taking responsibility for their current debts and institutional mechanisms that prevent the future irresponsible accumulation of both private and public debt. In many respects, there is a crisis of confidence in world economic leadership and that confidence needs to be restored before progress can be made in dealing with debt and world economic growth. </div>
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The leaders of the G-20 need to come together and create a new global sovereign debt stabilization fund (a global bailout package for lack of a better term) that in essence safeguards debt issues either through the World Bank or IMF or as part of a new institutional arrangement. Coupled with this would need to be conditions for countries to deal with their fiscal deficits over a three to five year period with credible plans to restructure their finances as well as transition payments (in essence a form of global equalization grant program) from the new global fund to deal with the shock of adjustment. In essence, this is a crisis in confidence and the current ad hoc approach needs to be replaced with the structure of a more formal mechanism that will generate the confidence in the world financial system needed to restore stability in world markets.</div>
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What about Canada? Well, Canada is in comparatively good shape but the indicators suggest concern. For Canada, there are high levels of private debt and public sector debt has grown but not to the extent that it has in Europe or the United States. However, watch out for the value of our dollar. Oddly enough, while the United States received the debt downgrade, the value of its dollar rose relative to ours. The U.S. problem is not the debt ceiling debate or the Standard and Poor’s downgrade but its lack of a credible long-term plan to resolve its debt issues and a very anemic economy. Its debt instruments – treasury bills - are still seen as a safe store of value. A weak United States economy means a drop in demand for Canadian exports and a slower economy – hence a drop in our dollar’s value. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/what_does_the_standard_and_poor_/"><b>What does the Standard and Poor's Downgrade Mean?</b></a></div>
<ul class="ul1">
<li class="li3">Aug 7, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/downgrade/"><span class="s2">downgrade</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/standard+and+poor%27s/"><span class="s2">standard and poor's</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/u.s.+debt/"><span class="s2">u.s. debt</span></a></li>
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Standard and Poor’s has downgraded the U.S. debt rating from AAA to AA+. Effectively speaking, there is still little risk of an actual default by the U.S. government on its debt and its borrowing costs are not likely to be affected very much given that about two-thirds of U.S. debt is domestically held anyway. So what does this mean? Well, its pretty much a direct comment on U.S. political behavior over the last month leading up to raising the debt ceiling. As well, there is another political message here that involves S&P taking a swing back at U.S. politicians. Recall, that in the wake of the mortgage loan debacle Standard and Poor’s was criticized by many – American politicians included - for not anticipating the mortgage loan crisis. Well, S&P is not going to make that mistake again and probably decided to make sure it anticipates any crisis with U.S. debt – as remote as it may be. Bond rating agencies have long memories.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/hamilton_and_thunder_bay__a_comp/"><b>Hamilton and Thunder Bay: A Comparison</b></a></div>
<ul class="ul1">
<li class="li3">Aug 5, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: none</li>
</ul>
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At first glance, comparing Hamilton and Thunder Bay seems inappropriate given that Hamilton has nearly five times the population of Thunder Bay and is located in the highly urbanized south of Ontario. Yet, for comparison purposes it would be difficult to find a resource manufacturing/port city of 100,000 in southern Ontario that is an eight hour drive from any other major Canadian urban centre. However, they are both “Lakeheads” with Thunder Bay and its port at the head of Lake Superior and Hamilton at the Head of Lake Ontario. Both have served as transshipment points to their respective hinterlands and both developed into major industrial centers – Hamilton with steel and Thunder Bay with rail car manufacturing and forest products. As well, both have been hard hit by the economic change of the last decade and the decline of manufacturing and have been trying to diversify their economies. </div>
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According to the 2010 BMA Municipal Study, Hamilton has 530,420 people while Thunder Bay has only 110,984. Over the period 2006-09, Hamilton’s population grew by 5.1 percent while Thunder Bay’s grew by only 1.7 percent. Hamilton is more densely populated but also still quite spread out. Though it has nearly five times the population, its population density is 475 people per square kilometer while Thunder Bay’s is 338. Interestingly enough, while Hamilton has five times the population, it only has about three times the length of paved roadways indicating the relatively higher dispersion of Thunder Bay’s urban setting.</div>
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Hamilton is the older of the two cities, dating back to the early 19<span class="s4"><sup>th</sup></span> century with city status for Port Arthur and Fort William – Thunder Bay’s predecessors - going back to the early 20th century. Yet, Thunder Bay has a higher proportion of its homes erected before 1986 reflecting slower housing development over the last few decades. Hamilton has benefitted from being closer to the GTA when it comes to housing growth over the last few decades. Household income is also higher in Hamilton compared to Thunder Bay – at 78,000 dollars versus 69,000.</div>
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While both cities have been subjected to the trauma of manufacturing decline, the economic indicators suggest that Hamilton has weathered the downturn relatively better than Thunder Bay. Per capita building permit values in Hamilton are double those of Thunder Bay, household incomes are higher and population growth faster. This is also apparent when some of the municipal government indicators are examined. Per capita tax assessments have grown faster in Hamilton than Thunder Bay. The per capita municipal financial position for Hamilton is better than Thunder Bay, according to the BMA study, and the debt reserve ratio is 0.8 for Hamilton and 2 for Thunder Bay. In terms of the impact on municipal fiscal position, Thunder Bay has fared comparatively worse.</div>
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One explanation for Thunder Bay’s poorer performance might lie in its municipal tax structure. Thunder Bay’s net municipal levy per capita currently stands at 1,319 dollars while Hamilton’s is only 1,269 dollars. However, taxes per detached bungalow on average are higher in Hamilton (though so are property values) as are standard industrial taxes per square foot as well as rates for things like neighborhood retail. Tax differentials are not sufficient to explain the difference in recent growth and activity. Location is probably a more important factor. There is simply a much larger population cluster surrounding Hamilton – both in Canada and the United States - providing it with economic opportunities that Thunder Bay can only dream of. </div>
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Thunder Bay is still a small isolated population island that needs to overcome locational disadvantages despite its location in the middle of the country. While Thunder Bay may be in the centre of the country’s east-west axis, unfortunately there are not a couple of million people to go along with it. Once again, it is the market depth of a larger population that provides much of southern Ontario with long-term economic growth opportunities as well as competitive pressure. Thunder Bay needs to focus new energy on how to boost its immediate urban as well as regional population if it is to grow in the long term. While population growth and associated congestion may seem to be drawbacks in southern Ontario, they also come with the opportunity that creates jobs and retains youth.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/future_funds_and_fiscal_folly/"><b>Future Funds and Fiscal Folly</b></a></div>
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<li class="li3">Aug 3, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/assets/"><span class="s2">assets</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+funds/"><span class="s2">fiscal funds</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hamilton/"><span class="s2">hamilton</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/private/"><span class="s2">private</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public/"><span class="s2">public</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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From time to time, there are occasional calls in Thunder Bay municipal politics to sell off public assets and invest the proceeds in future needs for the community. Whether it is our municipal golf courses, municipally owned land or even the municipal phone utility, the argument is that these activities often compete with the private sector and therefore the municipal government should divest themselves of them, create market activity and in the process generate cash – the proverbial win-win situation.</div>
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An interesting example of this process is in Hamilton, Ontario where in 2002, the Hamilton Hydro utility was sold and 137 million dollars raised in the process and invested in what was called The Future Fund. Between 2002 and 2007, 37 million dollars from the fund was invested in high priority infrastructure projects including the restoration of the Hamilton Art Gallery, rebuilding parts of the downtown and contributing to a Dieppe Memorial on the beach strip. The remaining 100 million dollars was put aside in a fund that was supposed to provide a perpetual source of funds for other worthy projects.</div>
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On the surface, this seems like a wise strategy but an enormous amount of discipline is needed to make it work long-term. Nothing is more tempting to politicians than a pool of seemingly idle money and unless the appropriate safeguards are put in place, a plethora of worthy projects seem to spring up that quickly create an incentive to dip into the capital. In Hamilton, the city’s general manager of finance recently announced that the bulk of Hamilton’s Future Fund will eventually shrink to about 10 million dollars in part because the bulk of what is left is going to be invested in Pan Am game projects. By 2014, there will only be 10.2 million dollars left in the fund that was supposed to generate income for projects in perpetuity. </div>
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Rather than loan the money to the Pan Am games, the board over seeing the fund was overruled by Hamilton City Council. Apparently, some of the original 100 million dollars was loaned out and repayment is expected after 2014. As well, any sale of harbor lands is apparently going to be used to replenish the fund and it is predicted to rise to 128 million by 2026 – barring any other loans or projects. Needless to say, the skepticism quotient is high in the minds of many.</div>
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The fact is, there was supposed to be 100 million dollars to provide income in perpetuity. An endowment approach to the proceeds of sales of public assets is a wise strategy and represents prudent use from the sale of public assets. This is a very important lesson of why it is sometimes better to retain successful income producing public assets such as municipal utilities rather than sell them off. No matter how sincere the intentions of the politicians are to wisely invest and manage the proceeds, over time politicians seem unable to restrain themselves from spending the pile of money on politically attractive projects. In the case of Hamilton, one may ask if spending 50 million dollars of their endowment on athletic games is the wisest use of the money. In the case of Thunder Bay, this story should serve as a warning to citizens the next time councilors suggest the sale of income earning municipal assets to raise cash. If the asset is earning an income, it should be retained. If it is sold, the proceeds should be invested in a fund with an autonomous corporate board that is outside the reach of myopic municipal councilors. Allowing politicians near large piles of cash without the appropriate institutional safeguards is fiscal folly.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_election_twitter_updat_1/"><b>Ontario Election Twitter Update</b></a></div>
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<li class="li3">Aug 2, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter+followers/"><span class="s2">twitter followers</span></a></li>
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Well, I took another look at the number of Twitter followers for the four Ontario provincial political party leaders and the distribution has not shifted very much. Dalton McGuinty still has about 45 percent of the followers followed by Tim Hudak at just over 31 percent, Andrea Horwath next at 18 percent and Mike Schreiner at about 5 percent. However, what is interesting is the growth rate in the number of followers between June 30th and my tally as of about 3pm August 2nd. As the table down below shows, while Dalton McGuinty still has the largest number of followers, the highest growth rate in the number of followers over the June 30-Aug 2nd period belongs to Andrea Horwath at 10.4 percent. Mike Schreiner of the Greens was second at 9.1 percent followed by Tim Hudak of the Conservatives at 8.7 percent and finally Dalton McGuinty was last at 8.2 percent. Apparently the Liberals have begun focusing on the NDP just as much as the PCs in their electioneering efforts. Does the growth in Twitter followers signal the start of a surge? We shall see what the next few weeks brings.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUXRQg8Uz3G1aQSLvnNyjj-lnVZ7taNGUbnfqF_iUt5uT7NbbE8kLvOoKqxAfA5sNojnhp-Dgyyz1YR0lxb1oyPsN5vj98blkNhmFr7orBKvSbzHoHv9b5snKSp1sUrR-6kP-VDlPvGNpi/s1600/preview_slide1-75.jpg" imageanchor="1"><img border="0" height="480" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjUXRQg8Uz3G1aQSLvnNyjj-lnVZ7taNGUbnfqF_iUt5uT7NbbE8kLvOoKqxAfA5sNojnhp-Dgyyz1YR0lxb1oyPsN5vj98blkNhmFr7orBKvSbzHoHv9b5snKSp1sUrR-6kP-VDlPvGNpi/s640/preview_slide1-75.jpg" width="640" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/manufacturing_malaise/"><b>Manufacturing Malaise</b></a></div>
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<li class="li3">Aug 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hamilton/"><span class="s2">hamilton</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manufacturing/"><span class="s2">manufacturing</span></a></li>
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Northern Economist is away from Thunder Bay and touring the Golden Horseshoe this week with Hamilton as the home base. Hamilton definitely shows evidence of the manufacturing decline that has hit the older industrial cities of southern Ontario. Hamilton was once one of Ontario's premier industrial cities with manufacturing rooted in steel and equipment sectors but the erosion of the last few decades has seen the steel sector reduced to a shadow of its former self in terms of employment. The carnage continues. Siemens announced last week that it is moving its operations to the United States - the loss of another 400 jobs. Meanwhile, U.S. Steel (Stelco’s successor) employees are still locked out.</div>
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Oddly enough, the demise of Ontario manufacturing has had a silver lining when it comes to energy. The loss of automobile and manufacturing plants in southern Ontario has reduced the demand for electricity by nearly 1000 MW. Meanwhile, the demise of the northern Ontario forestry sector has reduced demand by another 1000 MW. The hot humid summer has therefore not resulted in peak demand breaking any electricity demand records. There is now such a relative abundance of electricity that just the other day the <a href="http://www.thestar.com/opinion/editorialopinion/article/1032460--hydro-alert-for-ontario-s-leaders"><span class="s2">Roger’s Centre closed the roof and turned on the air conditioning</span></a> so fans could watch a baseball game in comfort. It must be so nice to know that the loss of all those forest and automobile sector jobs has had such a nice side benefit – perhaps this will be featured in election campaign literature this fall under the rubric of “Ontario’s Cool Economy.”</div>
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Hamilton has been trying to diversify its economy via knowledge and service sector jobs but the impact of the decline is quite evident in the older parts of the city. A drive down Barton Street towards Ottawa street reveals block after block of boarded up stores and shops – the effect is positively Great Depression like. While this has been a long-term decline, the process appears to have accelerated over the last couple of years. Yet, as in Thunder Bay, there is new retail activity – even in the east end – as big box stores replace some of the older retail shops. There is also activity in the west end and on the mountain and houses and condos are going up as Hamilton becomes more of a bedroom community to Toronto but the economic devastation of the older industrial city is ever present. In an effort to boost the downtown area, formerly one-way streets have returned to being two-way in the belief they will generate more stops and customers but any increase in traffic is probably an illusion from the increased congestion.</div>
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The poverty in downtown areas and social decay is quite evident. Even the more affluent areas of the city are not spared as gangs of dissolute individuals go about spraying graffiti on both private and public property. Homeowners whose fences back a path alongside the Linc Highway continually have their fences defaced and to add insult to injury, the municipal government sends them notices that they have ten days to clean up their fences or face up to 10,000 dollars in fines. This is perhaps an attempt by their city government at an economic stimulus program as homeowners spend quite a bit of money on paint from local retailers in order to clean up their fences – at least for a short time. </div>
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All in all, like many former industrial cities in Ontario, Hamilton has had a tough time. Yet, there is still a determination in the face of the economic challenges that many of us in northern Ontario can identify with. In the old Hamilton downtown area, on James Street, the old Lister Block, which had been in danger of being demolished, is actually being restored to its former glory. There has also been an impressive renovation of the farmers market and the public library, which is quite impressive. Hamilton has also invested in a substantial waterfront park. These are all symbols of hope and investment in the future.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgU0Jxy3Ywen22kTnNvmcpEs8hTSVk0Zx0F8zOSLofs14s_hFarUn76oeql439ip5mZb6G9GZmVzrymjl7aAuUiaYNc7yXvFmdvPB-W2vbf37ZrRPBTcvsA1AKWDIq5hKdYhbicXiwZuxQB/s1600/preview_photo2.jpg" imageanchor="1"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgU0Jxy3Ywen22kTnNvmcpEs8hTSVk0Zx0F8zOSLofs14s_hFarUn76oeql439ip5mZb6G9GZmVzrymjl7aAuUiaYNc7yXvFmdvPB-W2vbf37ZrRPBTcvsA1AKWDIq5hKdYhbicXiwZuxQB/s640/preview_photo2.jpg" width="480" /></a></div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-91964124571610379182016-12-14T15:00:00.000-08:002017-05-28T05:50:13.336-07:00July 2011 Posts<div class="p1">
<b>23 Posts from July 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_u_s__debt_ceiling__what_happ/"><b>The U.S. Debt Ceiling: What Happens August 2nd?</b></a></div>
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<li class="li3">Jul 29, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/crisis/"><span class="s2">crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt+ceiling/"><span class="s2">debt ceiling</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/resolution/"><span class="s2">resolution</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s2">united states</span></a></li>
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With the political situation in the United States still seemingly unable to resolve the debt ceiling issue, what will happen on August 2nd? I think there are three possibilities as to what will happen. First scenario, the debt impasse will be resolved in the wee hours just prior to August 2nd and a compromise reached that will raise the debt ceiling along with a combination of tax increases and expenditure reductions. Second scenario, there will be no political compromise and on August 2nd, President Obama will use his powers as President to safeguard the republic and an interpretation of Section 4 of the 14th Amendment to unilaterally raise the debt ceiling. Third scenario, there will be no solution reached effective August 2nd and the United States Federal Government will begin a process of shutdown similar to what just occurred in Minnesota. This will not be a debt default because apparently the next payment on the debt will not be due til about mid-August. The shutdown will free up the needed funds to service the debt averting default but at the cost of cuts and service reductions which will generate political mayhem. This may provide the necessary political environment and incentives to finally reach a compromise in the week or two after August 2nd.</div>
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The First Scenario is unlikely given the political entrenchment on both sides and the failure to reach a compromise to date. The Second Scenario is even more unlikely as it would require a degree of personal political fortitude that President Obama has yet to demonstrate. President Obama is more interested in being a friendly communicator than in being a heavy. At the same time, this may provide him the opportunity for more assertive leadership and if done successfully could politically cement him a second term. The Third Scenario is in my opinion probably the most likely of the three. Once actual shutdown of government functions occurs and people stop receiving social security cheques or other services, there will be a more direct political uproar that should create the necessary political pressure to resolve the situation.</div>
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The whole situation is quite remarkable given the wealth of the United States. After all, the United States is not Greece. The United States needs to do three things. First, raise the debt ceiling to deal with the immediate situation. Second, come up with a plan to balance their budget over the next three to five years with a combination of tax increases and expenditure cuts. Third, use some of the revenues from the increased taxes to set up a national infrastructure program to kickstart economic activity and restore consumer confidence and get their economy growing</div>
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For Canadians, we should be concerned given that all the uncertainty could place additional upward pressure on our dollar, which would hurt our export sector and harm our already weak recovery. It is going to be an interesting weekend.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/economy_shrinks_in_may/"><b>Economy Shrinks in May</b></a></div>
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<li class="li3">Jul 29, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a></li>
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<span class="s2"><a href="http://www.statcan.gc.ca/daily-quotidien/110729/dq110729a-eng.htm">Statistics Canada</a></span> released some rather ominous data when it announced that real gross domestic product decreased 0.3% in May, after no change in April and a 0.3% increase in March. The mining, oil and gas extraction sector was the main source of the decline in May, though manufacturing and construction also fell. On the other hand, wholesale and retail trade, the public sector, utilities as well as the finance and insurance sector increased. This does bode poorly for the total second quarter results - April, May and June - and unless June compensates, we may see a quarter of negative growth the next time the growth figures are announced. Output growth has apparently been hampered by weather - oil and gas extraction in Alberta were affected by wildfires. On the other hand, the 2011 Census has helped boost federal employment and public sector output growth. Overall, I think its still too early to say the economy is slowing but watch out for spillover from what is going on in the United States if the debt ceiling impasse drags on and the value of our dollar continues to rise. Slow U.S. GDP growth figures recently released are also a poor portent for our economy.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKnG8sDO535mDHHI9RUKR-dBKQghfEOztNy0UalZYpJ85BNs7sF0SCXeHUYO0zWjg-6vAsKPodR895BqaOMpxsk1JguIc57-P4vjPmROk-rhte1vNNQ54ziSgC77y3CV97ou_MM9nMfDuB/s1600/preview_c110729b.jpg" imageanchor="1"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKnG8sDO535mDHHI9RUKR-dBKQghfEOztNy0UalZYpJ85BNs7sF0SCXeHUYO0zWjg-6vAsKPodR895BqaOMpxsk1JguIc57-P4vjPmROk-rhte1vNNQ54ziSgC77y3CV97ou_MM9nMfDuB/s320/preview_c110729b.jpg" width="261" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyGCvNiWrVv6KRrqc-oghzxvPvnINaIvkeXaeFeWVBjeK_TATecPHh7V4n4SMHammmPNTryb4pD89FUYzrTohsI6F1LzCcPafZJwjO9JGd2fFOrSwVwK3ub1K7H1CsVqiX4cWX_Yyf2xrV/s1600/preview_c110729a.jpg" imageanchor="1"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyGCvNiWrVv6KRrqc-oghzxvPvnINaIvkeXaeFeWVBjeK_TATecPHh7V4n4SMHammmPNTryb4pD89FUYzrTohsI6F1LzCcPafZJwjO9JGd2fFOrSwVwK3ub1K7H1CsVqiX4cWX_Yyf2xrV/s320/preview_c110729a.jpg" width="294" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/wealth_and_its_distribution/"><b>Wealth and its Distribution</b></a></div>
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<li class="li3">Jul 27, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/distribution/"><span class="s2">distribution</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/inequality/"><span class="s2">inequality</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/wealth/"><span class="s2">wealth</span></a></li>
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Along with my academic research work in health economics and regional economic history, much of my research has focused on wealth in the nineteenth century and the analysis of probated estate wealth data. When the distribution of wealth in the nineteenth century is compared to today, it can be seen that inequality was generally higher then. However, what is interesting is that over time, the share of wealth held by the bottom forty percent of the wealth distribution has remained essentially unchanged. The poor, it would seem, are always with us. Visit my most recent post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/07/wealth-and-its-distribution-tomorrow-is-yesterday.html"><span class="s2">Worthwhile Canadian Initiative</span></a> to read more on this topic.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_free_1/"><b>Northern Economist in the Free Press on Thunder Bay's Economy</b></a></div>
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<li class="li3">Jul 27, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/resilience/"><span class="s2">resilience</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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Winnipeg Free Press - PRINT EDITION</div>
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<b><a href="http://www.winnipegfreepress.com/opinion/westview/thunder-bay-shows-its-resilience.html">Thunder Bay shows its resilience</a></b></div>
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By: Livio Di Matteo</div>
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THUNDER BAY -- Northwestern Ontario's forest sector crisis was a regional economic shock that resulted in massive employment losses and yet its major centre -- Thunder Bay -- has shown remarkable resilience.</div>
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Thunder Bay itself saw three out of four paper mills close and numerous sawmill job losses over the last decade, resulting in an employment decline of about 10 per cent from its 2003 peak.</div>
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Thunder Bay has yet to recover the employment losses of the last decade but there is evidence of a transitioning economy and growing economic activity. Despite its past dependence on the forest sector for much of its employment, Thunder Bay is adjusting and positive economic change is underway.</div>
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Building permits in Thunder Bay are showing an upward trend and the total value of building permits in 2010 increased 44 per cent over 2009.</div>
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Housing prices in Thunder Bay are also healthy and are on a pronounced upswing despite the forest-sector crisis. Since 2003, the average MLS housing price in Thunder Bay has risen from $111,927 to $153,800 in 2010 -- an increase of 37 per cent but still very affordable by Canadian standards. Another indicator is the passenger volume of the Thunder Bay International Airport, which, as the regional airport, services all of Northwestern Ontario. Since 1998, passenger volumes have increased by 30 per cent and indicate that despite the forest sector downturn there is still growing demand for air travel to and from the region.</div>
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Another positive indicator is population growth. According to recently released Statistics Canada data, as of July 1, 2010, Thunder Bay's CMA population was 126,683, which represents a 3.1 per cent increase from the 2006 census figure of 122,907.</div>
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The resilient economy in Thunder Bay is being driven by three forces: the transition toward a knowledge-based economy, expenditure on public-sector infrastructure and the growth and development of the mining sector in the region.</div>
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The new knowledge economy is focused on the Thunder Bay Regional Health Sciences Centre, the Northwestern Ontario School of Medicine, and the research work of the Thunder Bay Regional Research Institute.</div>
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The recent acquisition of a new law school by Lakehead University represents a further deepening of the city's knowledge sector.</div>
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With respect to public-sector infrastructure, the region has seen millions of dollars in provincial road construction and improvements as part of a planned $273-million investment in regional highways, including a major highway upgrade project just east of Thunder Bay.</div>
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As well, there is a new courthouse under construction, a waterfront development project, substantial recent investments in city roads and bridges, a new library and recreation trail development.</div>
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This public-sector construction is being complemented by retail expansion in the Intercity area as well as some proposed new hotel projects.</div>
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While retail expansion in Intercity was traditionally seen as detrimental to the former core areas of Port Arthur and Fort William -- what Thunder Bay was before amalgamation in 1970 -- that, too, is changing.</div>
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Port Arthur's core is now being promoted as a tourism-entertainment core with a theatre, casino, waterfront development and a possible location for a new events centre arena complex.</div>
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Fort William is now the location for government services with city hall, a new regional services board headquarters and the new courthouse. After decades of rivalry, it would appear the former twin cities are finally learning to share and build on their strengths.</div>
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Finally, there is Thunder Bay's growing role as a mining service centre as well as the projected developments in the Ring of Fire, an area in the James Bay lowlands that is the subject of intense mining exploration.</div>
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Mining in Northwestern Ontario currently employs several thousand people and much of the equipment and supply needs are being met out of Thunder Bay.</div>
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Moreover, the long-term potential of the Ring of Fire is enormous given its potential supplies of nickel, copper, zinc, gold, chromite and palladium. While the full potential of the Ring of Fire is still a decade away and hinges on competitive electricity prices and infrastructure investment, it is nevertheless a source of hope.</div>
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Thunder Bay's economy is not out of the woods yet and its recent performance does present a paradox.</div>
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On the one hand, population is growing, there is a plethora of new construction activity, and housing prices are rising. Yet total employment remains flat.</div>
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Given the economic trauma of the last decade and the slow process of recovery and transition, new employment creation has yet to overcome the losses of the forest-resource sector. However, with a sustained economic recovery underway in the city and region, one can expect to eventually see employment levels pick up.<br />
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Livio Di Matteo is professor of economics at Lakehead University.</div>
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Republished from the Winnipeg Free Press print edition July 27, 2011 A10</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/beacons_of_hope/"><b>Beacons of Hope?</b></a></div>
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<li class="li3">Jul 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/art/"><span class="s2">art</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/city+council/"><span class="s2">city council</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/humour/"><span class="s2">humour</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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Thunder Bay City Council has approved spending just over 900,000 dollars on artwork for the city's redeveloped waterfront that will consist of twin 21 meter steel structures with a programmed LED lighting system and sound system that will broadcast whispers narrated by locals. These beacons have generated a fair amount of controversy as any public art is bound to do especially given what is perceived by many to be a rather hefty price tag. The artist's rendition (see photo below) of what the beacons will look like does evoke a rather futuristic polished steel type vision at least to my eyes and does seem to be a bit at odds with the rugged natural landscape of Superior's shore. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXD3Ye6JkjMtGVCemRPoxcntrrpbWUVsY4RC56TwREoj2CBLZGG4kxotZK5YlagdW23NGG1-h6fYojHet8EsFSl7MeyGWguUaX6FWGqCtAQrl091pVDzbYqFS_KPlDe0bLWaCLHMkdytOs/s1600/preview_waterfrontartwork.jpg" imageanchor="1"><img border="0" height="228" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXD3Ye6JkjMtGVCemRPoxcntrrpbWUVsY4RC56TwREoj2CBLZGG4kxotZK5YlagdW23NGG1-h6fYojHet8EsFSl7MeyGWguUaX6FWGqCtAQrl091pVDzbYqFS_KPlDe0bLWaCLHMkdytOs/s320/preview_waterfrontartwork.jpg" width="320" /></a></div>
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Moreover, the idea of having "whispers" emanate from the Beacons seems to clash with the natural sound of the waves pounding the rocks and on foggy evenings might be positively spooky. Still, art is in the eye of the beholder and the first sign of good public art is that it does generate discussion and controversy and this certainly fits the bill. As for the price tag, well that is an interesting fiscal issue and if these beacons represent value for money is something ratepayers will have to deal with come the next municipal election. </div>
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Of course, these beacons will eventually need to be named. Just as the two lions marking the New York Public Library got names, so must these beacons and the names must reflect the "Duality" on which the artistic design is based. Perhaps, Arthur and William would be good names, symbolizing the past of the twin cities. For more local flavor, how about Neebing and Paipoonge? Or, if we want to commemorate the more recent past, perhaps naming them Keith and Bob in honour of our current mayor and past police Chief. Two beacons standing on separate piers evoking how they are forever together yet forever apart, all the while pulsating flashes of light and color at each other and then whispering off into the night. I eventually see a civic beacon naming contest coming with three choices designed to split the vote - a Thunder Bay tradition.</div>
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Ultimately, City Council, probably sees these beacons as lighting up the future with hope. I think they can be interpreted as fulfilling an intense subliminal desire to obtain guidance and direction to deal with the burdens of office. Whenever City Council is in a fog and unable to reach a decision, the Beacons will pulse on the waterfront through rain, snow and sunshine illuminating the path to the waterfront and all the great things that can be accomplished at taxpayer expense. They will prove an inspiration to us all. On particularly difficult issues, councilors can wander to the base of the beacons and await the direction of the whispers which will serve as a new oracle. What will the whispers be? "If you build it they will come..." "Raise taxes..." "Parking is important to the public..." "Your people love you..." "Its cold out here..." etc...</div>
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Of course, if City Council is simply looking for guidance and direction, they are always welcome to visit with Northern Economist. Northern Economist is always ready to help point the way ahead and it won't cost you $904,000.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh39X4C4d1UdjA6yaq614s2RuHakAfD3hgM3FVe391-QXMZGC_KuIT-YchZZx4NqtBTauJ83lehOix5e40CCFPJM4_Zcs0SuQbdR6Kiy8MMWqM_zpjTc74HmoNkbE3Qaw0UUqJaomtX3kjv/s1600/preview_dsc02165_copy2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh39X4C4d1UdjA6yaq614s2RuHakAfD3hgM3FVe391-QXMZGC_KuIT-YchZZx4NqtBTauJ83lehOix5e40CCFPJM4_Zcs0SuQbdR6Kiy8MMWqM_zpjTc74HmoNkbE3Qaw0UUqJaomtX3kjv/s320/preview_dsc02165_copy2.jpg" width="320" /></a></div>
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<b>Northern Economist is looking ahead.</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_regional_employment_comp/"><b>Ontario Regional Employment Comparison: Is the Recession Over for Everyone?</b></a></div>
<ul class="ul1">
<li class="li3">Jul 22, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario+election/"><span class="s2">ontario election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/regions/"><span class="s2">regions</span></a></li>
</ul>
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As Ontario moves into the fall provincial election campaign, the economy will definitely be a major issue. One important measure is job creation which can be estimated by looking at the level of employment. I've taken monthly employment data for Ontario from Statistics Canada. This monthly data is a 3-month moving average, unadjusted for seasonality. I've taken January 2005 as the base value of 100 and constructed an index of monthly employment from January 2005 to June 2011. It is plotted in the graph below and despite monthly fluctuations, generally shows a rising employment trend from 2005 to 2008, a decline due to the recession after 2008 and then a rising trend starting in early 2010 which has continued. It would appear that employment now is approximately where it was prior to the recession. Moreover, employment in Ontario June 2011 is about 8 percent higher than it was in January 2005.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijQMlN4EH-VzhGmfQcceijP3uEcAbyPMMBG0cNbJulqxKLwDw5tvwCQB6CHd0LEDNISCAG4cZhFCipmyItQGLGARAPe3jED_-c681Xe43zfqVY6mCNJ9JoFn_oOBJ2U4duru06mH2zH91q/s1600/preview_slide1-72.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEijQMlN4EH-VzhGmfQcceijP3uEcAbyPMMBG0cNbJulqxKLwDw5tvwCQB6CHd0LEDNISCAG4cZhFCipmyItQGLGARAPe3jED_-c681Xe43zfqVY6mCNJ9JoFn_oOBJ2U4duru06mH2zH91q/s320/preview_slide1-72.jpg" width="320" /></a></div>
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The recovery from the recession should bode well for the incumbent Liberals in Ontario but Ontario is regionally diverse and when the same calculations are done for the major economic regions, it would appear that not everyone has shared in the jobs recovery. The graph showing monthly employment over time for the regions is a bit busy but downward trends are noticeable for a number of regions - particularly the Northwest. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIbkeHMAxkto_l6ZYpa2lRDabzlx15khNgZrtRJsPBiHmXbAJlzWW0Jk4V-2tK2lAH_12I2yTFt5_Zl7CjXNTCn5Jm5WXGorX-nVYkCYebj24D8VdtgR6JywZvof12QensEsJ92k0DY-X7/s1600/preview_slide1-73.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIbkeHMAxkto_l6ZYpa2lRDabzlx15khNgZrtRJsPBiHmXbAJlzWW0Jk4V-2tK2lAH_12I2yTFt5_Zl7CjXNTCn5Jm5WXGorX-nVYkCYebj24D8VdtgR6JywZvof12QensEsJ92k0DY-X7/s320/preview_slide1-73.jpg" width="320" /></a></div>
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A clearer picture emerges if one simply looks at the overall change over time by region as in the bar graph below. If one looks at the percentage change in employment from start to finish, one can see that over the period January 2005 to June 2011 (by the way, the results are pretty much the same if you do it January 2005 to January 2011) the London area, Windsor-Sarnia, and the Northwest all saw overall drops in employment. The biggest percent age employment increases were in the Toronto area and Kitchener-Waterloo-Barrie (K-W-B) areas.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgu_ZGhLhCzuw0AI_A9qMhJ1s4y_ynyYRmjRV4aWLISgD5q-SYbmmTerTx763odaKeRMTbKwTEbb6uoJSAu0xv5gJ_KDQh8dFHrn1j0ceMvZUZ97lcdTHw30mxhoYVF0zQSqlUmKGDsuHss/s1600/preview_slide1-74.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgu_ZGhLhCzuw0AI_A9qMhJ1s4y_ynyYRmjRV4aWLISgD5q-SYbmmTerTx763odaKeRMTbKwTEbb6uoJSAu0xv5gJ_KDQh8dFHrn1j0ceMvZUZ97lcdTHw30mxhoYVF0zQSqlUmKGDsuHss/s320/preview_slide1-74.jpg" width="320" /></a></div>
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What might this mean for the October election? Well, Ontario is recovering quite nicely from the recession but the recovery is uneven. The areas that are doing the best - Toronto, K-W-B followed by Ottawa and the Muskoka region might be more forgiving of the governing party when it comes to the ballot box. The areas with slower employment growth (Hamilton-Niagara, Stratford-Bruce, the Northeast) and especially the negative employment growth areas may be more receptive to messages from the opposition parties. It will be interesting to see what the seat distribution looks like by these same regions after the election.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_election_twitter_update/"><b>Ontario Election Twitter Update</b></a></div>
<ul class="ul1">
<li class="li3">Jul 22, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/horwath/"><span class="s2">horwath</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hudak/"><span class="s2">hudak</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mcguinty/"><span class="s2">mcguinty</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario+election/"><span class="s2">ontario election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/schreiner/"><span class="s2">schreiner</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
</ul>
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Well, it is almost the end of July and I thought I would take a look at how Ontario's provincial party leaders are doing with respect to their number of Twitter followers. On my <a href="http://ldimatte.shawwebspace.ca/blog/post/the_ontario_election_and_twitter/"><span class="s2">June 30th post</span></a>, in the wake of poll results showing Tim Hudak's Progressive Conservatives with a commanding lead, I decided to see if this lead was also being replicated in the new social media via the number of Twitter followers each provincial party leader had. Dalton McGuinty had the most Twitter followers on June 30th despite the polls.</div>
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The number for June 30th, July 14th and July 22nd are presented below in a bar graph and they show that all four party leaders are exhibiting growth in the number of Twitter followers though the largest number of followers still belongs to Dalton McGuinty, followed by Tim Hudak, then Andrea Horwath and finally Mike Schreiner. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz1aRUnuf7xBgCeVkyAo7vq07JN_fv52E6bYhTzZevZAVdnKnX91hfNDlUtU2mwRJrR4TEwlNlfIydf8IQ3z6mdReLQqMjGRIverDvd6KrVw4__jKiQLbXleuwedVqPRF2YKiGLQbfcPeo/s1600/preview_slide1-70.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiz1aRUnuf7xBgCeVkyAo7vq07JN_fv52E6bYhTzZevZAVdnKnX91hfNDlUtU2mwRJrR4TEwlNlfIydf8IQ3z6mdReLQqMjGRIverDvd6KrVw4__jKiQLbXleuwedVqPRF2YKiGLQbfcPeo/s320/preview_slide1-70.jpg" width="320" /></a></div>
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However, they are growing in such a balanced fashion that the distribution remains unchanged from June 30th. As the accompanying pie charts show, Dalton McGuinty still has 45 percent of the Twitter followers, with Tim Hudak next still at 31 percent and Horwath and Schreiner still at the same shares. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9k1DmCcgXzEypg0dI7WNlqlyYblQEpwMbKOnkozHySem5hFnh-H_yxlDau796XtkBnywvkuKjeHf8yBZfplUsyHzCqF17FzKO2RjJJ2f2Rxflo0OyHqcIhQUm4T0lOpk0vz0SehsU4vhR/s1600/preview_slide1-71.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9k1DmCcgXzEypg0dI7WNlqlyYblQEpwMbKOnkozHySem5hFnh-H_yxlDau796XtkBnywvkuKjeHf8yBZfplUsyHzCqF17FzKO2RjJJ2f2Rxflo0OyHqcIhQUm4T0lOpk0vz0SehsU4vhR/s320/preview_slide1-71.jpg" width="320" /></a></div>
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At this point, it would appear that none of the leaders have done anything significant to attract followers at a differential rate. It is still early in the election and more importantly it is July. While the temperature has heated up, the election race itself is still pretty cold. Will keep you posted on changes as they unfold.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/health_outcomes___financing__an_/"><b>Health Outcomes & Financing: An Example</b></a></div>
<ul class="ul1">
<li class="li10"><span class="s3">Jul 20, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+expenditure/"><span class="s2">health expenditure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+outcomes/"><span class="s2">health outcomes</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/worthwhile+canadian+initiative/"><span class="s2">worthwhile canadian initiative</span></a></span></li>
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One of my areas of research is health expenditure and the release of new data is always an opportunity to do some exploring. I took a look at the new <a href="http://www.oecd.org/document/30/0,3746,en_2649_37407_12968734_1_1_1_37407,00.html"><span class="s2">OECD Health Data 2011</span></a> release and it sparked some exploratory empirical work to see if health outcomes are related to the funding share of the health system done privately. I did some regression work and the results are posted in my most recent post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/07/health-status-financing-an-example.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a>. Enjoy.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/how_is_thunder_bay%E2%80%99s_economy_d/"><b>How Is Thunder Bay’s Economy Doing: A Jobless Recovery?</b></a></div>
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<li class="li10"><span class="s3">Jul 20, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+transition/"><span class="s2">economic transition</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s2">population</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recovery/"><span class="s2">recovery</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></span></li>
</ul>
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There seems to be a lot of conflicting opinion and evidence on how well Thunder Bay is doing economically. The most recent thrust of poor news is from the <a href="http://research.cibcwm.com/res/Eco/ArEcoMEA.html"><span class="s2">CIBC July 18</span><span class="s4"><sup>th</sup></span><span class="s2"> Metro Monitor’s economic snapshot of Canadian cities</span></a>. The CIBC Metropolitan Activity Index for first quarter 2011 shows Thunder Bay as one of only three Canadian cities with a negative activity measure – along with Saint John and Saguenay. A number of variables go into this index and according to the CIBC’s calculations, Thunder Bay is doing particularly poorly in the areas of population growth, employment creation, the proportion of employment that is full-time, business bankruptcies, housing sales and non-residential building.</div>
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This seems at odds with how the economy actually seems to be doing in Thunder Bay. It is true that Thunder Bay (and the surrounding region) lost a lot of employment over the last decade but employment has stabilized though it actually has not grown much over the last couple of years. From a peak of average monthly employment of about 66,000 in 2003, employment declined to about 59,500 by 2009 and is currently averaging 58,100 for the first six months of 2011. Thunder Bay has yet to recover the employment losses of the last decade and much of the new employment created is part-time contract work interpreting some of the figures from the CIBC report. At the same time, there is visual evidence of robust economic activity in terms of construction activity on the public sector side (new courthouse, DSSAB building, waterfront) as well as the private sector side especially in terms of new hotel and retail construction and yet employment figures do not appear to be picking this up. As well, the most recent numbers for non-residential building permits (see <a href="http://ldimatte.shawwebspace.ca/blog/post/non-residential_construction_res/"><span class="s2">my recent blog post</span></a>) see a healthy increase for Thunder Bay. Again, where is the associated employment creation? </div>
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Another positive indicator comes on the population side. According to the just released Statistics Canada <a href="http://www.statcan.gc.ca/daily-quotidien/110720/dq110720e-eng.htm"><span class="s2">Report on the Demographic Situation in Canada</span></a> Thunder Bay is seeing population growth with much of it due to sub-provincial migration – that is migration within Ontario to Thunder Bay. As of July 1, 2010, Thunder Bay’s CMA population was 126,683, which represents a substantial increase since the 2006 census figure of 122,907 – an increase of 3 .1 percent. Essentially, Thunder Bay’s population has actually been growing at just under 1 percent a year since 2006. The decline due to natural increase and interprovincial migration has been more than offset by both international migration as well as sub-provincial migration. In other words, people are moving to Thunder Bay from within Ontario (my best guess there is that it is mainly from the surrounding region) as well as from other countries. This latter point is actually excellent news given that international migration to the city appears to have dried up after the 1970s. A new wave of immigrants will bring fresh perspectives and opportunities to the city.</div>
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Thunder Bay thus represents an economic paradox. On the one hand, population is growing and there is a plethora of construction activity and a growing hotel and retail sector and yet total employment remains stagnant. What is going on? If Thunder Bay’s population is growing, its economy transitioning and breaking new ground, why is it not creating large employment gains?</div>
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At best, one can hypothesize about some of the trends that might be going on. One of the first things the New Policy Institute we have been promised by the provincial government can do is start collecting more detailed micro-level data on the regional population and economy. Until then, here are some of the possibilities. </div>
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First, there is migration from communities hard hit by the forest sector into Thunder Bay and based on the average age profile of the forest sector prior to its collapse, many of these individuals are probably either retired or semi-retired and not always by choice given their resource sector skill sets. Indeed, there has been a withdrawal from the labor force (it has shrunk too) which is why local unemployment rates are so favorable compared to the rest of the country despite the drop in total employment.</div>
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Second, there is migration from the First Nation’s population around Thunder Bay into the city and a high birth rate and since much of this population is very young, it is going to be in school rather than in the work force. One way to corroborate this would be to find out if the First Nation's share of enrollment is growing in our local school boards. However, expect this to also change over the next decade as the First Nations population begins to age. </div>
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Third, while overall employment remains flat with jobs being both created and lost, the small growth that there is in knowledge economy jobs is largely being filled by migrants to Thunder Bay both from within Ontario and from outside the country. Essentially, there is a shortage of skill sets in some of the critical technical and scientific fields that are driving the local knowledge economy. This should be a hint to parents as to what they might want to encourage their children to study in college and university.</div>
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Fourth, even in those sectors that are quite active –such as construction – it is possible that much of the demand is seen as short run and is being met by overtime work rather than a lot of new hires. If the construction sector’s activity is sustained over time, one can eventually expect firms to commit to more hiring. Indeed, the <a href="http://www.thunderbayventures.com/"><span class="s2">June 2011 Thunder Bay Ventures Report</span></a> suggests that hiring intentions for the next year are up.</div>
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Finally, there has been some downsizing underway in the provincial public sector over the last six months and even though the job losses have not been widely publicized, perhaps these have also had some impact on local employment creation given the dependence of the local economy on public sector employment.</div>
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While the indicators at this stage seem conflicting, that is to be expected given the economic trauma of the last decade and the slow process of recovery and transition. Employment is not always a leading indicator but if there is indeed a sustained economic recovery underway in the city and region, one can expect to eventually see employment levels pick up. For the time being, we seem to have a jobless recovery.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_and_duluth__populati/"><b>Thunder Bay and Duluth: Population Size Matters</b></a></div>
<ul class="ul1">
<li class="li3">Jul 18, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/duluth/"><span class="s2">duluth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+activity/"><span class="s2">economic activity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s2">population</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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Thunder Bay residents flock to visit and shop in Duluth, Minnesota and continually remark how robust and vibrant Duluth's waterfront and downtown area is when compared to Thunder Bay. This appears to be all the more surprising given that the population of the city of Thunder Bay - at about 110,000 people - is much larger than the city of Duluth, which stands at about 86,000. One can point to the fact that much of Duluth's visitation and tourism actually comes from nearby Minneapolis-St. Paul (a two hour drive) which has a population of nearly three and a half million people as well as from Wisconsin. </div>
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However, this is only a partial explanation given that downtown and waterfront areas are not only a tourism attraction but are also a focus for your own community's activity. The fact is, Duluth is a much larger "community" than Thunder Bay when the population of the surrounding St. Louis, Carlton and Douglas counties - the Duluth metropolitan statistical area - is considered. There are nearly 280,000 people living in the broader Duluth area as compared to about 125,000 in the immediate Thunder Bay vicinity or census metropolitan area. Basically, the Duluth area has 2.2 times the population of the Thunder Bay area and as a result can support a much denser downtown core and waterfront area even without visitors from Minneapolis-St. Paul (and Thunder Bay). Even if one compares the geographically large Duluth MSA with the larger Thunder Bay District's population of 149,000, there is still a substantial difference in the population of the nearby regions.</div>
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The accompanying figure plots population for the two cities and their immediate vicinities for the period 1970 to 2010. One other thing to note, whereas Thunder Bay's CMA population has essentially stagnated since 1990, the Duluth MSA has actually seen some noticeable growth. Since 1990, the Duluth MSA population has grown by almost 4 percent whereas Thunder Bay's CMA population has shrunk by about 1.5 percent. The implications? When it comes to fostering economic activity, population size does matter.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgTgzAz65necXkJUM-icNNyRgldcTPtpv_ikysrP6OmIS2Hj9ZZXN2Tdqt8siEzhHVH5J3UhE98oTmPW4YfFv9htnhWZaMGiX6SluNyc0H7L6CDE9e3TUQe7xjbxbuiSMs1toF6PR-HE85/s1600/slide1-69.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgTgzAz65necXkJUM-icNNyRgldcTPtpv_ikysrP6OmIS2Hj9ZZXN2Tdqt8siEzhHVH5J3UhE98oTmPW4YfFv9htnhWZaMGiX6SluNyc0H7L6CDE9e3TUQe7xjbxbuiSMs1toF6PR-HE85/s320/slide1-69.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_the_free_p/"><b>Northern Economist in the Free Press</b></a></div>
<ul class="ul1">
<li class="li3"><span class="s1">Jul 18, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal-provincial+relations/"><span class="s3">federal-provincial relations</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federalism/"><span class="s3">federalism</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transfer+payments/"><span class="s3">transfer payments</span></a></span></li>
</ul>
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<a href="http://www.winnipegfreepress.com/opinion/westview"><b>The View from the West</b></a></div>
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Winnipeg Free Press - PRINT EDITION</div>
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<b>Time for provinces to grow up</b></div>
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By: Livio Di Matteo</div>
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Posted: 07/18/2011 1:00 AM</div>
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Next week, Canada's provincial premiers will meet in Vancouver. With provincial elections looming this fall for half of them -- Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador and Prince Edward Island -- one can expect little of substance occurring aside from photo ops and the perennial plea for more federal cash.</div>
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With the cash escalator of the Health Accord expiring in 2014, expect to see some manoeuvring on how to leverage more money from the federal government.</div>
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Yet, any provincial plea for more cash comes at a time when they have become the dominant fiscal tier in the Canadian federation.</div>
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In 1961, the estimated total tax revenue the provincial local sector took in -- excluding federal transfers, investment income and sales of goods and services -- was $3.8 billion, as opposed to $6.1 billion by the federal government.</div>
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By 2009, the provincial local sector was raking in $243.5 billion in tax revenue and the federal government $196.8 billion.</div>
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This represents a remarkable shift in the Canadian federal balance. Between 1961 and 2009, total provincial local tax revenues grew at a rate of 8.7 per cent annually, while those of the federal level have grown at 7.2 per cent.</div>
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The change in fortunes is also highlighted when tax revenues are compared to GDP. The federal tax revenue-to-GDP ratio fell from 14.7 per cent in 1961 to 12.9 per cent in 2009, while the equivalent ratio for the provincial local sector rose from 8.6 per cent to 18.3 per cent.</div>
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The fact is the provinces and their creatures -- the municipalities -- have become the dominant fiscal tier.</div>
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Yet, whenever the premiers gather, it is like adult children coming home to visit their parents and then quickly reverting to the grievances and behaviour of their early childhood.</div>
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Despite the fact the federal government still provides them with about 20 per cent of their total revenue and their combined tax revenues actually exceed that of the federal government, the provinces nevertheless inevitably clamour that they are the junior partners in the federation and their needs require yet more assistance.</div>
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This year's interactions between Ottawa and the provinces will likely mark a watershed. After a period of minority government, majority government is back, which means it can be assertive in terms of the direction it wishes to take the federal-provincial relationship.</div>
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There is some indication that the philosophical underpinning of the Harper government accepts the new status of the provinces and acknowledges their fiscal power as the dominant tier.</div>
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With power, however, comes responsibility, and Ottawa will likely see to it that the provinces accept more responsibility for their program expenditures, particularly in the area of social spending and health.</div>
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Based on its past actions in areas such as infrastructure and stimulus spending, the Harper government likely sees the role of the federal government not as an endless social transfer agency practising chequebook federalism but as a co-ordinator of the Canadian economic union.</div>
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The Martin government was comfortable with the role of the federal government as a social investor and it increased spending on social programs, especially health.</div>
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The Harper government seems to view the federal role more as traditional nation-building via spending on defence, Arctic sovereignty and infrastructure at both the provincial and municipal level.</div>
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In essence, the Harper government has a classical economic view, which it may increasingly apply to federal provincial relations.</div>
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In classical economic thought, the role of government is to provide a basic system of law and infrastructure for the state to enable private individuals to pursue their self-interest within a free market. Government is a night watchman.</div>
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Applied to federalism, Ottawa is the night watchman of the Canadian federation, providing a national framework of infrastructure and institutions within which the provinces will pursue their self-interest and structure their social programs. Ottawa will provide a core transfer of resources, but beyond that, the provinces will decide their own patterns of health and social spending, facilitated where possible with federal data-gathering and research to provide information.</div>
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The provinces will be treated as grown-ups who must go forth and make their own way in the world.</div>
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Livio Di Matteo is a professor of economics at Lakehead University.</div>
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Republished from the Winnipeg Free Press print edition July 18, 2011 A11</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/non-residential_construction_res/"><b>Non-Residential Construction Results In</b></a></div>
<ul class="ul1">
<li class="li8">Jul 15, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s3">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/non-residential+construction/"><span class="s3">non-residential construction</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recovery/"><span class="s3">recovery</span></a></li>
</ul>
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Statistics Canada has released its 2011 second quarter results for <a href="http://www.statcan.gc.ca/daily-quotidien/110715/dq110715b-eng.htm"><span class="s3">investment in non-residential building construction </span></a>which includes the categories of commercial, industrial and institutional construction. Investment in non-residential building construction remained at $11.2 billion in the second quarter, edging up 0.1% from the first quarter after growing 1.7% on average in the five previous quarters. Gains in commercial and industrial building construction were offset by a decline in the institutional component. When combined with another release showing manufacturing sales down in six provinces, it would suggest that the economic recovery is progressing but still somewhat fragile. The accompanying figure below suggests that non-residential construction has yet to surpass the pre-recession peak in 2008.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAu1dgyb-MLLRJ7GpEG6xsXYUpaeYNRB3x6LxHz382Lh2fYn_qMyTNDPmK334Sw_PHTQYb9iShUrOKSh9yeB6jT7BXoPi9tqT0OTE9xIQc84NLVFuAmVGhcYeeJ6pb-8bI_7NiorfowJ_P/s1600/preview_c110715a2.jpg" imageanchor="1"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAu1dgyb-MLLRJ7GpEG6xsXYUpaeYNRB3x6LxHz382Lh2fYn_qMyTNDPmK334Sw_PHTQYb9iShUrOKSh9yeB6jT7BXoPi9tqT0OTE9xIQc84NLVFuAmVGhcYeeJ6pb-8bI_7NiorfowJ_P/s320/preview_c110715a2.jpg" width="294" /></a></div>
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The results for the Canadian census-metropolitan areas show that relative to the first quarter, investment was up in 18 of the 34 census metropolitan areas. St. Catharines–Niagara and Toronto posted the largest gains, mainly as a result of higher spending on institutional projects. Statistics Canada reports the largest declines occurred in Edmonton and Saskatoon, as a result of decreases in the institutional and commercial components.</div>
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What is also interesting is the results from second quarter 2010 to second quarter 2011 – that is, the annualized results. Across the 34 CMAs, non-residential building construction rose from 7.916 to 8.240 billion dollars - an increase of 4.1 percent. On an annual basis, growth was lowest in Peterborough, Trois-Rivieres and Barrie and the highest in St. Catherines-Niagara, St. John’s and Thunder Bay. Canada's CMAs are ranked from highest to lowest annual growth in the accompanying figure.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEyH4W0zuTLi1_rMwC05RMMR9JXVK1uJRiN_Bm8QN6f0nwf1zfU4Wqf-g_-suiNTvpHhgeFK04gj2Qra3SFVXyQ04cbRNUHeXn7KCn_qnjRxnB3Sjz5HD6ceWobxBcUm1XU7nWsWyPzoC6/s1600/slide1-68.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiEyH4W0zuTLi1_rMwC05RMMR9JXVK1uJRiN_Bm8QN6f0nwf1zfU4Wqf-g_-suiNTvpHhgeFK04gj2Qra3SFVXyQ04cbRNUHeXn7KCn_qnjRxnB3Sjz5HD6ceWobxBcUm1XU7nWsWyPzoC6/s320/slide1-68.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/policy_advice_for_tim_hudak/"><b>Policy Advice for Tim Hudak</b></a></div>
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<li class="li3"><span class="s1">Jul 14, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s3">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+development/"><span class="s3">northern development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s3">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy+advice/"><span class="s3">policy advice</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/tim+hudak/"><span class="s3">tim hudak</span></a></span></li>
</ul>
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Ontario PC Leader Tim Hudak is in Thunder Bay today and along with an appearance at The Hoito will also be addressing a luncheon being sponsored by the Thunder Bay Chamber of Commerce. According to the most recent poll by Ipsos-Reid, Mr. Hudak's Conservatives hold an 11 point lead over the Liberals overall but have even stronger support outside of the GTA. Even Northern Ontario apparently has Mr. Hudak in the lead. However, it is only July and the election is not until October and given the voting tradition in the North, red and orange rather than blue are the usual autumn colours. Perhaps, Mr. Hudak will prove them wrong. Nevertheless, internal party polling must have revealed this trend earlier, which is why this week also saw more aggressive Liberal ads attacking Tim Hudak.</div>
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Mr. Hudak, should he become premier, will certainly have his hands full given Ontario's productivity challenge, Ontario's infrastructure challenge and Ontario's fiscal challenge. Moreover, there is also Ontario's northern economic development challenge. What policy suggestions would Northern Economist like to leave with Mr. Hudak? </div>
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First, Tim Hudak should enthusiastically embrace the North. The North is 90 percent of Ontario's land mass and is a storehouse of minerals, forest resources and hydro-electricity that can represent an investment frontier for Ontario in the 21st century. Mr. Hudak should become an advocate and salesman for northern Ontario economic development both at home and abroad. The North is not a problem, it is an opportunity for all Ontario but solutions require imagination rather than one-size fits all policies.</div>
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Second, Ontario and the Federal government together should set as their ambitious goal the four-laning of the Trans-Canada highway through all of northern Ontario by 2020. Such an ambitious infrastructure project will generate substantial economic activity and the improved transport corridor will generate long-term commerce and trade throughout the North. Such a corridor will also complete the vital east-west zone of highway transit for the Canadian federation. If this is too ambitious a proposal, I can live with completely four-laning the highway from Nipigon to Shabaqua, which would eliminate much of the potentially troublesome bottleneck that has all of the east-west traffic of the country going over just one bridge at Nipigon. </div>
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Third, the province should explore the creation of northern tax incentive and trade zones to spur economic activity and attract investment. These incentive zones are especially crucial in border areas immediately adjacent to the United States such as Sault Ste. Marie, Thunder Bay and Kenora. This is not special treatment but recognition of the economic challenges that more remote border regions with low population density face when trying to generate economic activity.</div>
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Fourth, the provincial government should allow the North to operate its own regional electric power grid through a regional power authority. The North is blessed with thousands of megawatts of potential hydroelectric power that is cost-effective, sustainable and not a contributor to greenhouse gases. A regional power authority could become a valuable tool for northern development and provide the cheap electricity for value-added processing and development necessary for mining in the Ring of Fire.</div>
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Finally, the province should allow the North to take on more responsibility for its economic development and foster institutional change to bring about more regional autonomy in the areas of energy, environment, transportation, economic development and resource management. Indeed, the creation of new hydroelectric corridors in the North could fall under the auspices of either a regional government or a new regional development authority. Moreover, a regional authority could also open up access to crown lands for cottage and recreational development. To date, crown lands have been administered as if they are as scarce as in the more populated South.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/another_road_to_northern_autonom/"><b>Another Road to Northern Autonomy?</b></a></div>
<ul class="ul1">
<li class="li8">Jul 14, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/autonomy/"><span class="s3">autonomy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/first+nations/"><span class="s3">first nations</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ring+of+fire/"><span class="s3">ring of fire</span></a></li>
</ul>
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Shawn Atleo, the National Chief of the Assembly of First Nations (AFN) wants to repeal the Indian Act (enacted in 1876) and completely transform the relationship between Ottawa and the First Nations. Atleo has called for the replacement of the federal Aboriginal Affairs department with a new body that would deal with First Nations on a government to government basis. In essence, this appears to be a call for autonomy though the exact details of what these new institutional arrangements might entail have yet to be worked out. Institutions are the arrangement that people have for dealing with one another - cooperating and competing - and are innovated when the perceived net benefits to a society are positive. More autonomy for First Nations could represent not only a benefit for First Nations but also for Canada as a whole.</div>
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This could be a remarkable transformation of the Canadian federation. Provincial governments currently deal with Ottawa on a government to government basis but within the framework of the Canadian federation. They have separate and concurrent powers with Ottawa and raise their own revenues as well as receive transfer payments. Is Atleo proposing a First Nation province within which reserves and bands would then have an internal status somewhat akin to municipalities within provinces? This would be a major constitutional undertaking that along with mobilizing hundreds of First Nations across the country, would also require resolutions passing in two-thirds of provincial assemblies representing at least 50 percent of the population. Or is Atleo proposing a new quasi-autonomous federal governmental organization to take the place of Aboriginal Affairs with a new set of roles and responsibilities?</div>
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Here in Northern Ontario, where there have been perennial calls for more regional autonomy as well as provincial status, this opens up a whole new dimension on the regional autonomy issue. Could a First Nations regional government be established with jurisdiction over the lands currently held by the First Nations? Would their land base or jurisdiction be augmented to also incorporate what are considered traditional lands? What would such a government look like and what would it do? Would it have jurisdiction over natural resources? Health care and education? This could certainly have implications for economic development in the Ring of Fire as well as mining development in general. It might however also provide a mechanism for resolving some of the impasses that have developed between mineral companies and specific First Nations by granting First Nations more specific jurisdiction over development on their lands. With more power also comes more responsibility as self-governance and autonomy means taking ownership not just of entitlements and rights but also implementing the tools to promote your own welfare.</div>
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All in all, this is fascinating stuff and quite possibly could become the defining constitutional and social event of the 21st century for Canada. It will be interesting to see what the plan actually is.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/hauser_s_law/"><b>Hauser's Law</b></a></div>
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<li class="li3"><span class="s1">Jul 14, 2011</span><span class="s2"> </span><span class="s1">Posted By: Livio Di Matteo</span><span class="s2"> </span><span class="s1">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hauser%27s+law/"><span class="s3">hauser's law</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s3">united states</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/worthwhile+canadian+initiative/"><span class="s3">worthwhile canadian initiative</span></a></span></li>
</ul>
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Economics has a number of “Laws” floating around that are rooted in empirical observation and then put forth as natural inexorable systemic laws. For example, in public finance, there is Wagner’s Law of Expanding State Activity, which links the size of the public sector to income. In health economics, there is Roemer’s Law, which basically states that a hospital bed built is a bed filled – a supply creates its own demand statement for health care. And most recently, there has been popular reference to what is known as Hauser’s Law in response to the U.S. debate over resolving its fiscal deficit. Hauser’s Law was formulated by W. Kurt Hauser of the Hoover Institute about 20 years ago and basically states that no matter how aggressive the tax regime, federal tax revenues as a share of GDP in the United States since 1930 have averaged just under 19 percent. I discuss Hauser's Law using American as well as Canadian data in my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/07/economics-has-a-number-of-laws-floating-around-that-are-rooted-in-empirical-observation-and-then-put-forth-as-natural.html#more"><span class="s3">Worthwhile Canadian Initiative</span></a>.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/canada_s_changing_federation/"><b>Canada's Changing Federation</b></a></div>
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<li class="li8">Jul 12, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/balance/"><span class="s3">balance</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federalism/"><span class="s3">federalism</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenues/"><span class="s3">revenues</span></a></li>
</ul>
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It is quite remarkable how over the last half century, Canada's provinces have grown in fiscal power to the point where they are now the dominant fiscal tier in the Canadian federation. Nowhere is this more evident than when looking at the ability to raise tax revenues. In 1961, the total tax revenue taken in by the provincial local sector – excluding federal transfers, investment income and sales of goods and services – was 3.8 billion dollars as opposed to 6.1 billion by the federal government. By 2009, the provincial local sector was raking in 243.5 billion dollars in tax revenue and the federal government 196.8 billion dollars. This represents a remarkable shift in the Canadian federal balance. The change in fortunes is even more starkly highlighted when tax revenues are compared to GDP. The federal tax revenue to GDP ratio fell from 14.7 percent in 1961 to reach 12.9 percent in 2009 while the equivalent ratio for the provincial local sector rose from 8.6 percent to 18.3 percent. As the accompanying figure shows, the federal tax revenue to GDP ratio has stayed remarkably stable since 1961. That of the provincial local sector on the other hand grew dramatically between 1960 and 1990 though it declined slightly in recent years. Keep in mind that these are just tax revenues and do not include investment income, income from the sale of goods and services and transfers from other levels of government. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtucquyJkNNH0RVmvdelCG3K6i795lDte6jcIzTFaAeA9jc9jY4GgxpvBDVNJ0lcZYAeL8jLBJLtkoopQvZt3O3T1JXm5_YBt1QGICSg-RaV3I8ar7yenfHVq598kyb18ZFvEYkXZNyCWa/s1600/slide1-67.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtucquyJkNNH0RVmvdelCG3K6i795lDte6jcIzTFaAeA9jc9jY4GgxpvBDVNJ0lcZYAeL8jLBJLtkoopQvZt3O3T1JXm5_YBt1QGICSg-RaV3I8ar7yenfHVq598kyb18ZFvEYkXZNyCWa/s320/slide1-67.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/measuring_crime_in_thunder_bay/"><b>Measuring Crime in Thunder Bay</b></a></div>
<ul class="ul1">
<li class="li8">Jul 12, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/crime/"><span class="s3">crime</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/measurement/"><span class="s3">measurement</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></li>
</ul>
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Is crime in Thunder Bay getting worse? That is an interesting question especially given the public perception that there is more crime in general and more violent crime in particular. One measure of violent crime is the homicide rate per 100,000 people. As Figure 1 shows, aside from the spike in 2009, there has been a downward trend over time on data available from Statistics Canada for the 1981 to 2009 period. The average homicide rate in the 1980s was 2.8 per 100,000 population in the 1980s and 2.9 per 100,000 in the 1990s but the first decade of the 21<span class="s4"><sup>st</sup></span> century has seen a drop to 1.5. </div>
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However, homicides are not the only type of violent crime. Any crime that uses or threatens force is a violent crime. Figure 2 provides data using what Statistics Canada terms the <a href="http://www.statcan.gc.ca/bsolc/olc-cel/olc-cel?catno=85-004-X&lang=eng"><span class="s3">Crime Severity Index</span></a>, a relatively new statistical approach which constructs a measure of crime based on the severity of the criminal acts committed as well as their volume. For the period 1998 to 2009 are presented an overall crime index, a violent crime index and a non-violent crime index. The results show that the overall crime index declined since 1998 and has remained relatively stable. The same pattern appears to characterize non-violent crime. However, the violent crime index shows a decline from 1998 to 2003 and then an increase afterwards. Since 2003, the overall crime index in Thunder Bay has increased by 4.3 percent and the index for non-violent crime has declined 8.7 percent. However, the index for violent crime is up 43.7 percent. This represents a substantial increase and confirms the popular sentiment that the streets of Thunder Bay have become more mean and violent even if the average homicide rate is down.</div>
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Figure 1</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-pLsrGA2YdMwtc1kTy_eneMFY9Xz79X4Mvqiud4rv8hu3QXwkm7WqE29FKd-0Dkfx9lzj1quS5efKdznmEsyrcHz24NlqyMiYNsucWQfzDLmQk5oCSbtz0mAj1LQELRQtk_VnsulLFOLw/s1600/preview_slide1-65.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh-pLsrGA2YdMwtc1kTy_eneMFY9Xz79X4Mvqiud4rv8hu3QXwkm7WqE29FKd-0Dkfx9lzj1quS5efKdznmEsyrcHz24NlqyMiYNsucWQfzDLmQk5oCSbtz0mAj1LQELRQtk_VnsulLFOLw/s320/preview_slide1-65.jpg" width="320" /></a></div>
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Figure 2</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1NorY0QShyphenhyphenhsKMucZ7k-hEsYW-23F5QnbDM4Wf_LKBPA-1wBI8NLMOmM1MT6kS3FfPx7z8ojziTy9OYmWEsXOKC4k0eb1roKd_tqoBKKEz3LxGzl925F-sMs4aMLlV2Y5Nh5M0HDOBA8m/s1600/preview_slide1-66.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1NorY0QShyphenhyphenhsKMucZ7k-hEsYW-23F5QnbDM4Wf_LKBPA-1wBI8NLMOmM1MT6kS3FfPx7z8ojziTy9OYmWEsXOKC4k0eb1roKd_tqoBKKEz3LxGzl925F-sMs4aMLlV2Y5Nh5M0HDOBA8m/s320/preview_slide1-66.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ranking_cab_fares__thunder_bay_i/"><b>Ranking Cab Fares: Thunder Bay Is Definitely Not Cheap</b></a></div>
<ul class="ul1">
<li class="li8">Jul 10, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/expensive/"><span class="s3">expensive</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/porter+airline+cities/"><span class="s3">porter airline cities</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxi+fares/"><span class="s3">taxi fares</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s3">thunder bay</span></a></li>
</ul>
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Flying to Toronto and relaxing with Porter's inflight magazine, I could not help but have my attention drawn to the information provided on cab fares from airport to downtown for the various cities that Porter Airlines now serves. The cab fare from airport to downtown is provided for 14 cities as well as the distance from the airport to downtown. I've provided that information in the table below along with a calculation of cab fare in dollars per kilometer.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi-CEIhIO-oPtAl8fRI3ajpjsPLY01c-gXz2QYafdewByrdO-E7myna25CsYQ5OxoCY8wfQnWF2-grsrblksY0LVNsqYJgPAxqZ0RnMsVMoz-d1SJWrql7QYBeK9tQN1qZ8mesSl8r1LmKQ/s1600/preview_slide1-63.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi-CEIhIO-oPtAl8fRI3ajpjsPLY01c-gXz2QYafdewByrdO-E7myna25CsYQ5OxoCY8wfQnWF2-grsrblksY0LVNsqYJgPAxqZ0RnMsVMoz-d1SJWrql7QYBeK9tQN1qZ8mesSl8r1LmKQ/s320/preview_slide1-63.jpg" width="320" /></a></div>
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The first observation is that Thunder Bay is not the only city with a conveniently located airport relative to its downtown/central area. Boston, Chicago, Windsor and Toronto (Island) all have airports that are less than 10 kilometers from their downtown. The second observation is that in terms of the total fare paid to get from the airport to downtown, Thunder Bay ranks in about the middle with Toronto (Island) the lowest and New York (Newark) the highest. However, as the graph below shows, when you rank these cities in terms of cab fare per kilometer, Thunder Bay ranks the highest at about $5 per kilometer traveled. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxNp_ZzhcPTSjRB5836vwalonTYqNe3o3CWNSi_YhDUe5eeScZyjhxTIRHDG5k3iPEA6HHBRcWbqsG-l3Xy5780VyOxtKIluS0f-BI5Yz9MhYRC8Ds3vORQevJDw1XknIJ5u5WyL4Nr2UQ/s1600/preview_slide1-64.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxNp_ZzhcPTSjRB5836vwalonTYqNe3o3CWNSi_YhDUe5eeScZyjhxTIRHDG5k3iPEA6HHBRcWbqsG-l3Xy5780VyOxtKIluS0f-BI5Yz9MhYRC8Ds3vORQevJDw1XknIJ5u5WyL4Nr2UQ/s320/preview_slide1-64.jpg" width="320" /></a></div>
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The third observation is that Thunder Bay is definitely a very expensive city in which to take a cab - something that surely must rankle business and leisure travelers to our city. We are more expensive than Boston, Toronto, Ottawa and Chicago. I don't think it is because of our rugged northern terrain. Even other Northern Ontario cities - the Sault and Sudbury - are much cheaper in terms of dollars per kilometer.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_toronto/"><b>Northern Economist in Toronto</b></a></div>
<ul class="ul1">
<li class="li8">Jul 8, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/chsrf/"><span class="s3">chsrf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/conference/"><span class="s3">conference</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/"><span class="s3">health</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sustainability/"><span class="s3">sustainability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/toronto/"><span class="s3">toronto</span></a></li>
</ul>
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I will be in Toronto this weekend to present at a pre-conference symposium being held by the <a href="http://www.chsrf.ca/Home.aspx"><span class="s3">Canadian Health Services Research Foundation</span></a> (CHSRF). The symposium is an event being held in conjunction with the <a href="http://www.healtheconomics.org/"><span class="s3">International Health Economics Association</span></a> Meetings also being held in Toronto. The symposium is titled: <a href="http://www.chsrf.ca/NewsAndEvents/Events/Event/11-04-13/Symposium_pr%C3%A9paratoire_de_l_International_Health_Economics_Association.aspx"><span class="s3">Policy Options for the Financial Sustainability of Healthcare Systems in Canada and Abroad</span></a>. I will be presenting an overview of a recently completed study on Canadian public healthcare sustainability titled "Diagnosing the fiscal viability of the healthcare system in Canada." Given the growing interest in the sustainability of public sector health care in Canada, this should prove to be a very interesting session full of ideas and am looking forward to the other presentations by national and international health economists. More when I get back.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQFn1MCw8P7gSmKupE9VPbDHcetwsgC7-nd2Gk7VYTKR2hvwz8_Q5FHpgmZqfzKpDxgF1Sfb0VJD1Q3uuOTNI7MHXkePJeGQAYF3-VDBDUSd_6wsVTVA_rPH80I_CpHGtwX5aas9patSjO/s1600/preview_photo-2.jpg" imageanchor="1"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQFn1MCw8P7gSmKupE9VPbDHcetwsgC7-nd2Gk7VYTKR2hvwz8_Q5FHpgmZqfzKpDxgF1Sfb0VJD1Q3uuOTNI7MHXkePJeGQAYF3-VDBDUSd_6wsVTVA_rPH80I_CpHGtwX5aas9patSjO/s320/preview_photo-2.jpg" width="240" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/new_housing_prices_in_north_down/">New Housing Prices in North Down</a></b></div>
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<li class="li8">Jul 7, 2011<span class="s2"> </span>Posted By: Livio Di Matteo<span class="s2"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s3">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/new+housing+prices/"><span class="s3">new housing prices</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s3">northern ontario</span></a></li>
</ul>
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In what could be an indicator of overall weakness in the regional economy of Northern Ontario, the latest results on <a href="http://www.statcan.gc.ca/daily-quotidien/110707/dq110707a-eng.htm"><span class="s3">new housing prices released by Statistics Canada</span></a> show year over year declines in new housing prices for Thunder Bay and Sudbury. According to the release, the New Housing Price Index (NHPI) rose 0.4% in May following a 0.3% advance in April. Toronto and Oshawa as well as Montréal were the top contributors to the NHPI increase in May. As well, between April and May, prices increased the most in Regina (+1.7%) followed by Kitchener–Cambridge–Waterloo (+1.0%) as well as Toronto and Oshawa (+0.9%). </div>
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The graph below shows the year over year results. Statistics Canada reports that among the 21 metropolitan regions surveyed, 6 posted 12-month price declines in May, led by Windsor (-4.4%) and Victoria (-1.7%). Greater Sudbury and Thunder Bay saw decline but parts of the traditional manufacturing belt of Ontario also saw declines - such as London and Windsor. As usual, areas closest to the GTA - Hamilton & Oshawa - seemed to do well also given that they are spillover communities from the Toronto market. </div>
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All this of course adds new fuel to whether or not the housing market in Canada is overvalued and is poised for a bust. Of course, there is really no "Canadian" housing market per se but a series of regional ones scattered from east to west. There are declines in new house prices in some parts of the country but some of these are areas that are generally experiencing economic distress. An exception is the Ottawa-Gatineau region which being the capital region is traditionally insulated from the business cycle but which despite the year over year increases also apparently saw a drop in new house prices between April and May this year. Interesting to note that Vancouver also saw a drop in the new house price index. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh14KadtTMdm80u1Us3EECaFrB-baQOGISn8uoqGMrRfzS7wDCK0tLym_XesZS_95MKfkZ1RB0M0iCVybmOer0cQJqi-gSKtEvfW12sT-YgWp-wj7eY4yKPIQrZaIMwIUcKt98xJOVyCuLh/s1600/slide1-62.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh14KadtTMdm80u1Us3EECaFrB-baQOGISn8uoqGMrRfzS7wDCK0tLym_XesZS_95MKfkZ1RB0M0iCVybmOer0cQJqi-gSKtEvfW12sT-YgWp-wj7eY4yKPIQrZaIMwIUcKt98xJOVyCuLh/s320/slide1-62.jpg" width="320" /></a></div>
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<b>23 Posts from July 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_historical_perspective_on_the_/"><b>A Historical Perspective on the United States Public Debt</b></a></div>
<ul class="ul1">
<li class="li3">Jul 6, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+crisis/"><span class="s2">fiscal crisis</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/"><span class="s2">gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+debt/"><span class="s2">public debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s2">united states</span></a></li>
</ul>
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With the August 2<span class="s3"><sup>nd</sup></span> deadline for raising the United States public debt ceiling looming, it might be useful to take a longer-term view on exactly how bad the US debt situation is at least with respect to the past. I got U.S. public debt figures from 1790 to 2010 from the U.S. Treasury site. I got CPI (1982-84=100) and GDP for the same period from Economic History Services (EH.net) and combined with population data constructed two graphs: the debt to GDP ratio and real per capita public debt. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXgIZnExUy0oQz0StNd9jS2sSa3Znzcoz9WNX23s8HakNpOca8lsbvgoB0OaI1sS2A2poAp7IXZckYeR5AYpg8edUGexIHulmOSSXTT7TGpl_4aDbBdmNwKZ0NJSz5tAianeMFkfIrHaKt/s1600/preview_slide1-59.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXgIZnExUy0oQz0StNd9jS2sSa3Znzcoz9WNX23s8HakNpOca8lsbvgoB0OaI1sS2A2poAp7IXZckYeR5AYpg8edUGexIHulmOSSXTT7TGpl_4aDbBdmNwKZ0NJSz5tAianeMFkfIrHaKt/s320/preview_slide1-59.jpg" width="320" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKK4lymiOMKbsNOO6gDTcHafTudzgp8kwlIsLR0jTmYsfpCzM6A0hUEWPQMZTPoaiuFys79N3hYtNdAWxSnETAMrOhE8rjdgM_p0EijBPhe_y0i27XgqLPsGY79gqUp9lV6A-gJkXe9w1w/s1600/preview_slide1-60.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjKK4lymiOMKbsNOO6gDTcHafTudzgp8kwlIsLR0jTmYsfpCzM6A0hUEWPQMZTPoaiuFys79N3hYtNdAWxSnETAMrOhE8rjdgM_p0EijBPhe_y0i27XgqLPsGY79gqUp9lV6A-gJkXe9w1w/s320/preview_slide1-60.jpg" width="320" /></a></div>
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The results are interesting. At 92.5 percent of GDP, the US public debt is currently at its second highest point in history exceeded only by the Second World War period when the debt to GDP ratio hit 121 percent. However, the Second World War is a unique period and if one removes it from the picture, the current the debt to GDP ratio is the highest it has ever been. Aside from the Second World War and the immediate post-war era, the US public debt to GDP ratio was rarely above 40 percent. When real per capita debt is examined, the US public debt is now the highest it has ever been at about 20,000 dollars per capita in 1982-84 dollars. The current incline is part of increases that began in the mid-1980s reversing nearly 40 years of declining real per capita public debt after the Second World War. </div>
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What is interesting is that when you look at the annual growth rates of real per capita public debt, they were much higher in the nineteenth century. The average annual growth rate of real per capita public debt was 21 percent from 1790 to 1899 and about 5 percent from 1900 to 2010. The last five years however have seen some double digit increases in real per capita debt suggesting a shift in growth trends. Higher per capita debt growth is not unexpected in the 19<span class="s3"><sup>th</sup></span> century given the United States was a young country with a vast frontier and lots of infrastructure to build. Road and railway building take a lot of money and the United States like many other countries provided government assistance for transportation and communication infrastructure. </div>
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However, accumulating large amounts of debt when your economy is rapidly expanding is quite a different situation from doing it when your economy is stagnating. That is the crux of the problem in the United States. The last three years in particular have seen a stagnant economy which has made the accumulation of large amounts of debt a more serious burden to the economy. In the short term, the US dilemma is dealing with the politics of raising the debt ceiling to avoid what could be a default on its debt. In the medium term, the United States has to raise government revenues as well as reduce spending to close the fiscal gap that is fueling the debt. In the longer term and most importantly, the United States has to start growing its economy again. This is its challenge for the 21st century.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/is_living_in_the_north_bad_for_y/"><b>Is Living in the North Bad for Your Health?</b></a></div>
<ul class="ul1">
<li class="li3">Jul 5, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/comparison/"><span class="s2">comparison</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/death+rates/"><span class="s2">death rates</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/"><span class="s2">health</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay+region/"><span class="s2">thunder bay region</span></a></li>
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Statistics Canada provides a lot of valuable data and it is interesting from time to time to gather some data and make some comparisons between where we live here in Northern Ontario and the province as a whole. I collected the data on the age-standardized death rates for the <a href="http://www12.statcan.gc.ca/health-sante/82-228/details/page.cfm?Lang=E&Tab=1&Geo1=HR&Code1=3562&Geo2=PR&Code2=35&Data=Rate&SearchText=thunder%20bay&SearchType=Contains&SearchPR=01&B1=All&Custom="><span class="s2">Thunder Bay District Health Unit region and for Ontario from the community Health Profiles </span></a>site and the results show that generally speaking, death rates in the region are higher than Ontario for most diseases.</div>
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In terms of overall age-standardized deaths per 100,000 population (see table below), the number for the Thunder Bay District is 594.1 deaths while for Ontario it is 521.8 – about 14 percent higher. Once you start looking at the specific causes of death, large differences are present. For example, the colorectal cancer death rate is 20 percent higher, lung cancer death is 12.3 percent higher while death rates from heart disease, stroke and other circulatory conditions is 10.1 to 21.8 percent higher. Some exceptions are in the area of breast and prostate cancer death rates which are 39.2 and 7.5 percent lower in the Thunder Bay District compared to Ontario as a whole. Most disturbing is the accidental death rate - which is 42.3 percent higher in the District as well as the suicide rate which is 120.8 percent higher than Ontario's and the HIV death rate which is 144.4 percent higher.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF8IZgHCZ32SiS4dsXVyvJcupROkwyeM68ly9rye4tOLlqD3vS59xZy9sKyJWV4urMGREiVL40NF33qydl01CsxPjNSYqG5XaxJq6OKgUs-mxO1oC05VSvwXulDyzM4hzEzPx1wfdamAAZ/s1600/preview_slide1-58.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF8IZgHCZ32SiS4dsXVyvJcupROkwyeM68ly9rye4tOLlqD3vS59xZy9sKyJWV4urMGREiVL40NF33qydl01CsxPjNSYqG5XaxJq6OKgUs-mxO1oC05VSvwXulDyzM4hzEzPx1wfdamAAZ/s320/preview_slide1-58.jpg" width="320" /></a></div>
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Some of these differences can no doubt be attributed to lifestyle factors. For example, residents in the Thunder Bay District Health Unit Region relative to Ontario as a whole are more likely to be overweight, obese, smoke and drink heavily as well as consume fewer fruits and vegetables. Some of it could also be due to lower educational attainment in the region given the well known correlation between education, income and health status. Some of it could also be due to medical access. For example, 84.4 percent of residents in the Thunder Bay District Health Unit Region report a regular medical doctor whereas 91.1 percent of Ontarians do. However, there are actually more family physicians per capita in the Thunder Bay District relative to Ontario but there are also far fewer specialists. As well, for many procedures, rates are actually higher in the Thunder Bay District (eg. knee replacements, hip replacements) which can either indicate better access or more chronic problems. For example, arthritis rates are also higher in the region compared to Ontario.</div>
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In any event, the reasons for the higher death rates in the region are complex. Nevertheless, death rates are higher and one needs to ask if all factors for this difference have been accounted for and if everything possible is being done to address this situation? Is a higher death rate simply an attribute of living in the North along with climate and the wildlife? Is it a function of the resources being spent on our regional health care system, in particular the shortage of specialists? Is it a lifestyle choice given the tendency towards more smoking, drinking and overeating in the region? Is there something we can learn in how breast and prostate cancer is being handled in the region given the lower death rates there that can be applied to other conditions? How to reduce the death rate to reflect the rest of the province? Interesting questions for which I do not have answers.</div>
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<div class="statcounter"><a title="vBulletin analytics" href="http://statcounter.com/vbulletin/" target="_blank"><img class="statcounter" src="http://c.statcounter.com/6528705/0/aa6c5f8c/1/" alt="vBulletin analytics" ></a></div></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/past_real_estate_busts__evidence/"><b>Past Real Estate Busts: Evidence from the Lakehead</b></a></div>
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<li class="li9"><span class="s4">Jul 1, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/fort+william/"><span class="s2">fort william</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing+bust/"><span class="s2">housing bust</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/port+arthur/"><span class="s2">port arthur</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+estate+busts/"><span class="s2">real estate busts</span></a></span></li>
</ul>
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Housing prices in Canada and the possibility of a burst housing bubble were back in the news during this past week. A <a href="http://www.calgaryherald.com/business/House+price+collapse+coming+report+warns/5028451/story.html"><span class="s2">report by Capital Economics</span></a> said that housing prices in Canada could fall by as much as 25 percent over the next three years as a result of a loss in market fundamentals that include record levels of houshold debt and overvaluations relative to incomes. Of course, we probably think that housing busts are the kind of things that only happen in other places but they have happened in Canada in the past - the early 1990s in Toronto and Calgary come to mind. They have also happened in our more distant Canadian past on a scale that might surprise you. Indeed, housing busts also lie in the economic past of Thunder Bay.</div>
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I've been collecting estate files and wealth information for a number of years now and one of my data sets is annual probated wealth data for the Thunder Bay area over the period 1885 to 1930 and it includes the real estate valuations of the deceased's estate. This time period includes the wheat boom era that saw the growth of entire new cities in Western Canada and an associated real estate boom that came to a crashing halt after 1912. Prices were fueled by a speculative frenzy that was the result of the belief in cities like Regina, Winnipeg, and even Thunder Bay that they were all going to be the "Chicago of the North" and there was massive overbuilding as well as zoning of land that ultimately lay empty for years. Case in point - the Parkdale area just north of the Arthur Street Marketplace a.k.a. Thunder Bay Mall - it was originally zoned residential in 25 foot lots in 1907! It has only been the last decade that they finally started building houses there.</div>
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Using my data for the twin Lakehead cities of Port Arthur and Fort William I have constructed a Locally Weighted Scatterplot Smooth using STATA of real estate value per decedent versus year (1,645 individuals). The smoothing is done to highlight the long term trend in the value of real estate over this entire time period as using only the annual averages show a bit more variation.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ552uz9nigUhmcXrlU7mIPCx5OpvoAkb8TlQ2Ya0gVI-8oJmyARbFDAPSZuSWKzEedXZmFzcQDPojvvQ0d9dsdu7Z66hB5kyq7U0UULpFtPdTvJN3sUD7FGYA8yEUdpZXYqtBsvN2i1Wi/s1600/6a00d83451688169e2015433662438970c.jpg" imageanchor="1"><img border="0" height="232" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZ552uz9nigUhmcXrlU7mIPCx5OpvoAkb8TlQ2Ya0gVI-8oJmyARbFDAPSZuSWKzEedXZmFzcQDPojvvQ0d9dsdu7Z66hB5kyq7U0UULpFtPdTvJN3sUD7FGYA8yEUdpZXYqtBsvN2i1Wi/s320/6a00d83451688169e2015433662438970c.jpg" width="320" /></a></div>
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As the Figure shows, the smoothed real estate value per probated decedent in the twin cities climbed from the mid 1880s and peaked in 1912. In 1890, the value of real estate was about 900 dollars per person - this rose to 4,400 dollars by 1912. Then came the bust, brought about by the tightening of credit and the war which dried up immigration and prices dropped - and continued dropping for a long time. There was a brief rally right after the war but the drop resumed and real estate per decedent bottomed out at about 2,800 dollars (remember, all these values are nominal - the drop looks even steeper if inflation adjusted dollars were used). From 1912 to 1925 - the value of real estate held per person fell by about 36 percent. Increases then resume after 1925 during the Roaring 20s but the data ends in 1930 and I suppose we can all guess what the Great Depression might have done to this rally. I also have a plot of the share of rw - total wealth held as real estate (done as a ratio of real estate to total wealth) and it shows an increase from 1885 to about 1905 - a plateauing at just over 45 percent during the boom and the First World War, and then a drop after 1920.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEga7sjnvXaOpFxXMZBe-420OjYyBX4wdOqbI0qnFI9E_6VWY538Dz_sydcjJX3BnTmLTdPm6AA98u2kGrhpg1fmvarpJynX47N8ptNd1pfV8DNRfF9Z7DqVeZrjz3K_DP0p9HBDZYOlrn7i/s1600/preview_graph-1.jpg" imageanchor="1"><img border="0" height="232" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEga7sjnvXaOpFxXMZBe-420OjYyBX4wdOqbI0qnFI9E_6VWY538Dz_sydcjJX3BnTmLTdPm6AA98u2kGrhpg1fmvarpJynX47N8ptNd1pfV8DNRfF9Z7DqVeZrjz3K_DP0p9HBDZYOlrn7i/s320/preview_graph-1.jpg" width="320" /></a></div>
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Anyway, it took a long time for the results of this housing bubble to work their way out of the local economy in Port Arthur and Fort William. The value of real estate dropped and stayed down for decades. At the Lakehead, it was not until the resource boom and baby boom of the postwar era that real estate values began to climb again. Anyway, the collapse of real estate values and the associated wealth effects are not a pretty process. A 25 percent drop over three years as predicted by Capital Economics has precedents in what has occurred in our own past.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-62923839192650972492016-12-14T14:03:00.003-08:002017-05-28T05:49:34.238-07:00June 2011 Posts<div class="p1">
<b>18 Posts from June 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_ontario_election_and_twitter/"><b>The Ontario Election and Twitter Followers</b></a></div>
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<li class="li3">Jun 30, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
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Ontario has a provincial election in October and the pace of the campaign will certainly heat up as the summer progresses. Tim Hudak's Progressive Conservatives are apparently heading towards a majority government in the Ontario election on Oct. 6, based on a <a href="http://www.windsorstar.com/news/Poll+puts+Hudak+Tories+election+driver+seat/5009973/story.html"><span class="s2">new poll by Forum Research</span></a>. The poll of 3,198 people, a large sample size, suggests that 41 per cent of Ontario voters will vote for the PCs, 26 per cent support the reigning Liberal party, 22 per cent want the NDP to win, and eight per cent back the Green party.</div>
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Social media will also be important in this election and in a replay of what I did for the federal election this spring, here is the Twitter follower count for the four Ontario political party leaders as of noon on June 30th. </div>
<table cellpadding="0" cellspacing="0" class="t1" style="width: 168.0px;">
<tbody>
<tr>
<td class="td1" valign="middle"><div class="p5">
Hudak (PC)</div>
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<td class="td2" valign="middle"><div class="p6">
7899</div>
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<td class="td1" valign="middle"><div class="p5">
Horwath (NDP)</div>
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4518</div>
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<td class="td1" valign="middle"><div class="p5">
McGuinty (LIB)</div>
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11477</div>
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Schreiner (GR)</div>
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1386</div>
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</tbody>
</table>
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A visual is usually much more interesting so a pie chart follows:</div>
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The results here differ from the most recent poll result and would suggest that the Liberals under McGuinty with 45 percent are still in the lead at least as measured by Twitter followers. Tim Hudak (PC) is next with 31 percent followed by Horwath (NDP) at 18 percent and Schreiner (Green) at 6 percent. However, at this early stage, all the Twitter count is probably showing is the number of core committed followers a leader currently has. A poll is a much more random sampling and it will be interesting to see as the election campaign progresses if the Twitter distribution converges on the poll results.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgysYleko5Qp21dtiADDrWu_ufqPlgEDwJmwOQ81p8Gj1ffoPzn7Nnxrm2p9QOnIcnjcAaxYHGMRixaBcmzc-W6x7ZQP4NNi_iP326sBfFANPnqxfLrg3-0qdSPDtR6WEDmO1JMNPwHdHXr/s1600/preview_slide1-57.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgysYleko5Qp21dtiADDrWu_ufqPlgEDwJmwOQ81p8Gj1ffoPzn7Nnxrm2p9QOnIcnjcAaxYHGMRixaBcmzc-W6x7ZQP4NNi_iP326sBfFANPnqxfLrg3-0qdSPDtR6WEDmO1JMNPwHdHXr/s320/preview_slide1-57.jpg" width="320" /></a></div>
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<a href="http://www.windsorstar.com/news/Poll+puts+Hudak+Tories+election+driver+seat/5009973/story.html#ixzz1Qm8O99yI"></a><br /></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_s_battered_families/"><b>Ontario's Battered Families</b></a></div>
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<li class="li3">Jun 28, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/declines/"><span class="s2">declines</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/family+income/"><span class="s2">family income</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
</ul>
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Statistics Canada today released <a href="http://www.statcan.gc.ca/daily-quotidien/110628/dq110628b-eng.htm"><span class="s2">family income data for sub-provincial areas</span></a> for 2009 taken from the 2009 personal income tax returns. According to family income data derived from 2009 personal income tax returns, Ottawa–Gatineau was the census metropolitan area (CMA) with the highest median total family income ($89,410), followed by Calgary ($88,410), Edmonton ($86,250) and Regina ($83,550). The largest percentage increases in median total family income between 2008 and 2009 in CMAs were in St. John's (+5.0%), Saint John (+2.9%), Ottawa–Gatineau (+2.3%), Regina (+2.3%) and Saguenay (+2.1%). </div>
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Given the recession, there were also declines. What is notable about these results is how many of the declines over the period 2008-2009 were in Ontario, reflecting how battered Ontario was during the recession. Using the data for census families (census family refers to a married or a common-law couple, with or without children at home, or a lone-parent of any marital status, with at least one child living at home) and drawing graphs showing the percentage change in median total family income, it turns that that all CMAs in Ontario saw a decline except for Ottawa-Gatineau and Kingston. The largest percentage declines in Canada as well as Ontario occurred in Windsor and Greater Sudbury. Outside of Ontario, hardest hit were Alberta and parts of British Columbia with Victoria as an exception. All the other CMAs saw increases. The charts provide an interesting snapshot.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyhiai5z6X_iX468XC3VQ8AJfUHjuFRFFP7MqjhX5GrNvj0693JXpzZvd9QLBqn0xIxRIlueldqm07o4F4oOPcXO9gtO79pSOK5lxkkHJj_OW7c83PAKEs-0lqdb_DLeSpYfgJzMzCfFWx/s1600/slide1-56.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyhiai5z6X_iX468XC3VQ8AJfUHjuFRFFP7MqjhX5GrNvj0693JXpzZvd9QLBqn0xIxRIlueldqm07o4F4oOPcXO9gtO79pSOK5lxkkHJj_OW7c83PAKEs-0lqdb_DLeSpYfgJzMzCfFWx/s320/slide1-56.jpg" width="320" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizYADTP8eIwACcmualDC9vR6JT87PAjO3q9vhDdeGGsNvknsiX0raWMUSP8XUNqS3gMfj87fSlKTqNsamWOBdb2Z0VaUYH8ADJ4vyB4PMlnKmCXwMiVDwSrCaNc8rx1pry9ddYKdwT27ds/s1600/slide1-55.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizYADTP8eIwACcmualDC9vR6JT87PAjO3q9vhDdeGGsNvknsiX0raWMUSP8XUNqS3gMfj87fSlKTqNsamWOBdb2Z0VaUYH8ADJ4vyB4PMlnKmCXwMiVDwSrCaNc8rx1pry9ddYKdwT27ds/s320/slide1-55.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_asymmetry/"><b>Northern Asymmetry</b></a></div>
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<li class="li11"><span class="s3">Jun 28, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+development/"><span class="s2">northern development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+growth+plan/"><span class="s2">northern growth plan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/plan+nord/"><span class="s2">plan nord</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/quebec/"><span class="s2">quebec</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/resources/"><span class="s2">resources</span></a></span></li>
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The most recent point of comparison between Ontario's Northern Growth Plan and Quebec's Plan Nord lies in the difference in marketing. Quebec's Premier <a href="http://www.ctv.ca/CTVNews/Canada/20110627/charest-heads-to-europe-to-promote-northern-plan-110627/"><span class="s2">Jean Charest is in Europe</span></a> promoting Quebec's economic development as well as Quebec's Plan Nord. He will be visiting England, Belgium and Germany during the course of this week promoting Quebec but more importantly promoting northern economic development in the mining and resource sectors. Of course, Quebec''s plan is quite easy to market given the dynamic and assertive nature of its language and content. Charest says that the Plan Nord could lead to 11 new mining projects during the next few years as well as 80 billion dollars in public and private investment. Charest is also planning to visit China and Japan this month to promote the Plan Nord.</div>
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On the other hand, Ontario is not promoting its northern development and its Northern Growth Plan in as engaged a fashion as Quebec. Why? Well, Ontario's plan for the most part is a rather bland collection of plans to engage in further planning. It is difficult to market boring platitudes in a manner that does not put your audience to sleep. While Northern Ontario politicians have to sit through provincial government summits and seminars that endlessly repeat the same empty statements in order to demonstrate their fealty to Queen's Park, international financiers and politicians would simply leave the room. </div>
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It is however, more than this. Ontario's government seems to be embarrassed about mining and resource development in the North whereas Quebec's government sees its North as a resource frontier and an opportunity for development. Quebec's government has embraced its north whereas Ontario's government probably wishes it would go away. The Queen's Park bureaucracy sees the North as a far flung region full of rocks and trees to be administered as a sparsely populated peripheral colonial possession with strange people who want to hunt and fish. After all, the conventional wisdom at Yonge and Bloor is fish are our friends and not our food. Food is something you find in its natural habitat - the supermarket shelf. Northern Ontarians engage in activities not compatible with the environmental lobby that has swayed so much decision making at Queen's Park when it comes to Northern Ontario land and resource policy.</div>
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The Ontario Northern Growth Plan was not designed for Ontarians as a symbol of where their economic future can take them. It is merely another cynical political device designed to make Northern Ontarians feel that they are are indeed valued when in reality they are not. There is a profound asymmetry in how the northern resource frontier is perceived and valued by the Government of Ontario and the Government of Quebec. That is why Jean Charest is in Europe selling his province's north and Dalton McGuinty isn't.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_multiplex_endgame/"><b>The Multiplex Endgame</b></a></div>
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<li class="li11"><span class="s3">Jun 26, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/multiplex/"><span class="s2">multiplex</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/short-sighted+thinking/"><span class="s2">short-sighted thinking</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban+development/"><span class="s2">urban development</span></a></span></li>
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On Thunder Bay City Council’s agenda for Monday evening will be the shortlist for the “proposed events centre” with the top three choices now narrowed down to: Innova Park, the downtown north core and land near the Thunder Bay International Airport. What is remarkable is that the debate is focusing on location whereas the project has still not been approved. Moreover, while the studies to date have noted a need to replace the aging Fort William Gardens facility, there has been little discussion of how the new multi-purpose events centre will impact the city-owned auditorium. After all, the multiplex will also be an alternate venue for some of the smaller events that the auditorium currently hosts, which will eat into its revenue. However, I believe there will be an events centre and that now makes its location the key issue despite the sideways process pursuing it.</div>
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If Thunder Bay is going to make a strategic investment in its future, a location in the north/Port Arthur core waterfront area should be its first choice given the waterfront development going on there and the designation of the area as a tourism/entertainment area. The events centre should be a signature piece of architecture that will become a marketing symbol of Thunder Bay’s skyline and waterfront. It will anchor an urban entertainment and convention area that will give the city a concentrated area of walkable urban nightlife with diverse dining and entertainment opportunities. The second best choice is neither the airport location or Innova Park, it is the downtown south/Fort William Core given the fact that it is already home to the Fort William Gardens (a home for sixty years despite the absences of acres of asphalt parking that seem so vital to proponents of Innova Park) and is also a higher density core area undergoing renewal. Locating the new events centre either near the airport or Innova Park will be a decision made on the basis of short-term convenience and will set Thunder Bay back a generation in terms of its urban development.</div>
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Thunder Bay’s history as two cities gave it two core areas but much of the development since 1970 has occurred in the intercity area and created a dispersed, car-oriented and low-density urban area. While the intercity area is a logical place for private sector development given its location between two population clusters, also locating public buildings there ostensibly to deal with north-south rivalry has destroyed the density needed for an urban feel to the city as well as cost-effective public transit. It has only been the last decade that a move back towards the core areas has begun with the new historical museum, the courthouse, the casino and the new Magnus Theatre projects going into the core areas – unlike the auditorium and art gallery which went into intercity. Putting the events centre outside either of the core areas will represent a reversal of this process.</div>
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Despite City Council’s assertion that all the short-listed sites are in the running, it is hard not to feel that the events centre is slowly being maneuvered into the Innova Park location. The three short-listed choices have already set up the classic Thunder Bay location strategy maneuver – a north side choice, a south side choice and the middle “compromise” choice that will be many people’s second best solution. We have already seen this employed before in Thunder Bay with hospital location. Moreover, given what seems to be a concerted development strategy to make Junot/Golf Links a commercial corridor, major land owners and developers in the area (including the City which owns Innova Park) would also find their property values enhanced by a major new greenfield project in Innova Park. </div>
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I think City Council after several more months of public contemplation and self-flagellating debate designed to demonstrate how personally hard this decision has been for them will opt for Innova Park because it enhances the Junot/Golf Links development strategy that seems to be occurring, makes use of Innova Park – the city promoted industrial park that has sat empty for years - and fulfills the desire of many car-oriented residents in the city for sites with lots of parking. This decision will cement a new western fringe of dispersed urban development for Thunder Bay, set back the development of urban core density and leave us with a new generation of cheap box buildings that say we are still a frontier town with little long-term vision aside from having shiny new buildings. City Council will atone for this decision by creating more bike lanes and sidewalks and start a new campaign on how wonderful the quality of life is in Thunder Bay. I dare them to prove me wrong. On Monday night, never mind a short list. Given there is already an implicit decision to build the events centre, pick the north core waterfront location and start planning on how to make it work.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_growing_aroun/"><b>Northern Economist Growing Around the World</b></a></div>
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<li class="li3">Jun 25, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+economist/"><span class="s2">northern economist</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/world/"><span class="s2">world</span></a></li>
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Northern Economist continues to attract interest and is now attracting over 1,000 visits a month. Moreover, the visits are not just from Northern Ontario but from across Canada, the United States and indeed around the world as the map below indicates. There have been recent visits from India, Taiwan, Spain, Russia, the UK. Thank you to all visitors for stopping by and I look forward to visits in the future. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfawU-VnUmHDxYhbIxpjFMOyVsmM6lPDO8-1E7teiac4oMT2Iu401YVy3rE9LRpW8KVcnzKTcmlQN8q8r0BBD_xDcXTy2yyGC_9b0dWR-X1n1K6k7bJnWve6oj6VM57kiXIHUXUcxaHc9o/s1600/preview_screen_shot_2011-06-25_at_9.26.18_am.jpg" imageanchor="1"><img border="0" height="177" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfawU-VnUmHDxYhbIxpjFMOyVsmM6lPDO8-1E7teiac4oMT2Iu401YVy3rE9LRpW8KVcnzKTcmlQN8q8r0BBD_xDcXTy2yyGC_9b0dWR-X1n1K6k7bJnWve6oj6VM57kiXIHUXUcxaHc9o/s320/preview_screen_shot_2011-06-25_at_9.26.18_am.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/class_sizes_and_education__the_l/"><b>Class Sizes and Education: The Lakehead Board Has a New Policy</b></a></div>
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<li class="li3">Jun 24, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/class+size/"><span class="s2">class size</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/education/"><span class="s2">education</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/lakehead+board/"><span class="s2">lakehead board</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy/"><span class="s2">policy</span></a></li>
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I've just discovered that the Lakehead Public School Board in Thunder Bay is implementing a class size policy in its high schools for the coming school year. To the best of my knowledge, the policy is if the class size is going to be below eighteen students, then the class will not be offered. This is obviously based on cost considerations and having students in larger classes will allow the Lakehead board to have fewer teachers. </div>
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This policy is interesting for two reasons. First, there has been a general move by the provincial government towards smaller class sizes at the elementary school level. Given scarce resources, if there are smaller classes at the elementary level, then the resources have to come from somewhere and obviously some are coming from the secondary school sector. This means fewer electives at the secondary school level as only the most "popular" courses will generate the minimum number of students. However, in some programs, even required courses are going to be impacted and may result in split grade classes. What this may mean for the diversity of course offerings and the quality of the educational experience for secondary school students has not to my knowledge been elaborated on by the Lakehead Board. </div>
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Second, what is more amusing about this is that during the school closures that occurred in Thunder Bay by the Lakehead Board during the first term of the McGuinty government when Gerard Kennedy was Education Minister - closures of the Port Arthur Collegiate and Fort William Collegiate high schools in particular - the case was made that those schools were too small to offer the diversity and breadth of courses that only larger high schools could offer. Well, here we are half a decade later and now it appears that even the much larger high schools are apparently having issues with resources and probably enrollment too. </div>
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The new larger schools obviously do not have the student numbers to offer all the courses they used to. It was my contention during the school closure debate that the Lakehead Board would probably have been better off with keeping FWCI and PACI and closing two of the larger high schools. A system with one large and one smaller high school on each side of town was more in keeping with the projections for longer term enrollment. Instead, there probably still is building overcapacity in the Lakehead board which when combined with a resource shift towards elementary schools is now aggravating the situation. The Lakehead Board got its shiny new high school in the wake of the closures but there are still resource issues. And of course, students now will have to pay the price in terms of diminished course offerings and probably crowded classes. After all, while there is a minimum of 18, my guess is the upper end number will be much more flexible. Of course, this is only the beginning. Given that there is overcapacity, which Lakehead Board high school will be next to close?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/airships__infrastructure_and_the/"><b>Airships, Infrastructure and the North</b></a></div>
<ul class="ul1">
<li class="li11"><span class="s3">Jun 23, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/airships/"><span class="s2">airships</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/first+nations/"><span class="s2">first nations</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ring+of+fire/"><span class="s2">ring of fire</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transport+infrastructure/"><span class="s2">transport infrastructure</span></a></span></li>
</ul>
<div class="p4">
Having just got back from a four-day fly-in fishing trip into Ontario's North, one acquires a new appreciation for the beauty of this vast land as well as the rugged geography and the challenges of providing transportation in this region. Development of the Ring of Fire will require transportation infrastructure and the Ring of Fire Conference held in Thunder Bay yesterday discussed proposals for transportation infrastructure. Of course, the proposals have a familiar ring - building new all-weather roads as well as building a new rail line. These are expensive pieces of transportation infrastructure and will provide access to the Ring of Fire and immediately adjacent areas. There are many First Nations living in Ontario's Far North who rely on winter roads for bringing in supplies and these ice roads have become increasingly fragile with the shorter winters brought about by climate change. A railroad or road to the Ring of Fire would not necessarily meet the needs of all remote First Nations.</div>
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One solution that would be cost-effective in meeting the needs of First Nations as well as providing a means to transport heavy equipment and supplies for mining companies lies in an old technology that is receiving some updates - Lighter Than Air Vehicles, also known as airships. A visit to the Daily Climate website reveals an article titled <a href="http://wwwp.dailyclimate.org/tdc-newsroom/2011/05/airships-as-climate-solution"><span class="s2">Floating Into the Future</span></a> that deals with new airships and their possibilities. The new airships allow for heavy loads that can be transported long distances quite cheaply and with a minimum of ground infrastructure as airstrips are not required. According to Barry Prentice, a transport economist at the University of Manitoba and a proponent of airships : "The cost of building all-weather gravel roads in northern Manitoba is $1 million per kilometer" but "If transport airships were available, then it would be hard to justify any roads." An example of the new technology is the prototype by Lockeed known as the Skytug that would have a range of 1,000 nautical miles and carry a payload of 20 tons. Such airships could also have some passenger capability.</div>
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Is this approach feasible? After all, there have been similar claims in the past about new airship technology and airships have yet to stage a major comeback. However, their utility in accessing remote regions is indisputable and maybe its time to look into their potential more deeply. Think of the money that would be saved by not having to build major road or rail lines in areas with muskeg or permafrost. Think also of the potential for manufacturing jobs in Thunder Bay to build and maintain airships as well as the transport jobs from locating an airship hub near rail and port facilities. This is something that should at least be investigated given the potential benefits to the region's economy.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/a_father_s_day_reflection/"><b>A Father's Day Reflection</b></a></div>
<ul class="ul1">
<li class="li3">Jun 18, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/abruzzo/"><span class="s2">abruzzo</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/father%27s+day/"><span class="s2">father's day</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/migration/"><span class="s2">migration</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ortona/"><span class="s2">ortona</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/saturnia/"><span class="s2">saturnia</span></a></li>
</ul>
<div class="p4">
For me, Father’s Day is a time to reflect on the role my father played in my life and the examples he set. He was the most amazing man I have ever known. Nicola was born and raised in harsh conditions near Ortona in Abruzzo, Italy and came to Canada in 1957 to start a new life. On his return from railroad work in western Canada, he settled in Fort William, Ontario (now Thunder Bay) because its location on the western shore of Lake Superior reminded him of Ortona on the Adriatic. My father worked construction and then at a pulp mill but he also was industrious after hours doing concrete jobs on the side and leaving hundreds of driveways and sidewalks in Thunder Bay as testaments to his work. With only a grade 3 education, he learned English and devoured books and newspapers. He also taught himself carpentry, plumbing and electrical wiring and used those skills to build and maintain his family’s home. </div>
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His most important lessons for life include hard work, perseverance and the importance of education. He was always improving his house and garden even in the face of serious illness, which claimed him prematurely at the age of 57. He made sure my sister and I both went to school, explaining how improved our lives would be if we learned to earn money “with our pens, rather than with shovels”. Indeed, at about the age of six my father took me shopping at Loblaws and every week bought me a volume of the World Illustrated Encyclopedia, insisting that I read every volume. Finally, he taught me how important it is to always have a sense of wonder. My father was astounded by Canada’s spectacular scenery, its forces of nature, and the opportunities opened up to him by what was a vast and magnificent land possessing infinite wealth and opportunities. To this day, so am I.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwBTaP-XRYeixXeefBEq-MIN7dNCVNKqCFXU_Xlh7Mx1mMLM2XEMdply9-nNDj30t-lJSglxm_Cje9QMqZ9GshZOnVhKISuGbJGTjtsoWYemsI-w8NSZ4cdQR91zcNBYsAT8yepXX5H0nk/s1600/preview_slide1-54.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwBTaP-XRYeixXeefBEq-MIN7dNCVNKqCFXU_Xlh7Mx1mMLM2XEMdply9-nNDj30t-lJSglxm_Cje9QMqZ9GshZOnVhKISuGbJGTjtsoWYemsI-w8NSZ4cdQR91zcNBYsAT8yepXX5H0nk/s320/preview_slide1-54.jpg" width="320" /></a></div>
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The photo above is of my father and his traveling companions shortly before embarkation on the Saturnia at the Port of Naples. He is in the back row at the far right - with what seems to be a rolled up newspaper in his jacket pocket. Immediately to his right is his friend Armando, who also moved to Fort William and became my Godfather. In the front row, far left, are two brothers - Ariste and Alberto - who eventually moved to Hamilton and with whom my father reconnected after 30 years in Canada. During a visit to Hamilton in the late 80s, my father went through the phone book and found them.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_real_estate_prices_reces/"><b>Ontario Real Estate Prices Recession Proof</b></a></div>
<ul class="ul1">
<li class="li3">Jun 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing/"><span class="s2">housing</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/prices/"><span class="s2">prices</span></a></li>
</ul>
<div class="p4">
Bank of Canada Governor Mark Carney gave his talk in Vancouver yesterday and delivered a warning on housing prices and housing markets. According to the <a href="http://www.theglobeandmail.com/report-on-business/economy/housing/carney-warns-on-housing-markets/article2062166/"><span class="s2">Globe and Mail</span></a> report: “…the housing market may be overheating, as his ultra-low interest rates, combined with too much optimism on the part of buyers, fuels prices in the country’s hottest markets.” He did not use the words or term “speculative bubble” but noted that housing prices in Canada were now 13 percent above their pre-recession peak.</div>
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I went back to my CMHC data from their <a href="http://www.cmhc-schl.gc.ca/en/corp/about/cahoob/cahoob_001.cfm"><span class="s2">2010 Housing Observer</span></a> Report and decided to extract the Ontario numbers for the 2000 to 2009 period to see what the increases have been like over the last decade. Interestingly enough, over the period 2009 to 2009, average Ontario residential prices for 15 major centres rose steadily (Fig1) – there does not appear to have been any drop due to the recession in 2008 or 2009. There were some drops for individual cities – Peterborough and Windsor – in 2008 and growth in Toronto slowed, but overall, real estate prices in Ontario cities continued to barrel ahead. </div>
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Figure 1</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvUgr88kx0TT2t9MAlkVvmND8o6BjGIctWF7t3Ftheb3BEVxDvWAbTB5p2ntMRYnogDZPg5CxpXTDXkoNjkw-xL_Phelp6ddY8grQ8qq-rZMkh5IREYDbIMsdOYPA6Ng-BUWYKsmtbgTXR/s1600/preview_slide1-51.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvUgr88kx0TT2t9MAlkVvmND8o6BjGIctWF7t3Ftheb3BEVxDvWAbTB5p2ntMRYnogDZPg5CxpXTDXkoNjkw-xL_Phelp6ddY8grQ8qq-rZMkh5IREYDbIMsdOYPA6Ng-BUWYKsmtbgTXR/s320/preview_slide1-51.jpg" width="320" /></a></div>
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However, some cities did better than others and it may surprise you to see where the greatest growth in average residential prices was over the period 2000 to 2009. As the accompanying figure (Fig2) shows, the top three cities for growth in average residential real estate prices were Ottawa, Kingston and Sudbury. Toronto, was in the bottom half of the pack in terms of percent increases though the lowest increases were in Oshawa, Thunder Bay and Windsor – all three cities ravaged by the manufacturing recession. However, even Oshawa did rather well compared to Thunder Bay and Windsor and that is probably the advantage of being close enough to the GTA market that you can serve as a bedroom community. Unfortunately, Windsor and Thunder Bay do not have that advantage and their housing prices bore more of the brunt of their local economic conditions. Still, they increased.</div>
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Figure 2</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMxNTMF1d4OqlkNiXpKKM_jlpxhNNZOTgE4lmR5_27-gZkKuSW2Hb7tW0aqxxTDSq-Z9MGVvaAlNoBdLp-ZPowb3k9qhM78h3aq8dnQ1C5iy01lRLVhlBZ9JJib2YH_oARnRtolHx5kJG7/s1600/preview_slide1-50.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjMxNTMF1d4OqlkNiXpKKM_jlpxhNNZOTgE4lmR5_27-gZkKuSW2Hb7tW0aqxxTDSq-Z9MGVvaAlNoBdLp-ZPowb3k9qhM78h3aq8dnQ1C5iy01lRLVhlBZ9JJib2YH_oARnRtolHx5kJG7/s320/preview_slide1-50.jpg" width="320" /></a></div>
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However, prices in 2009 are still highest in Toronto where the average was 396,154 dollars (Fig3). Next was Ottawa at 304,801 dollars and then Hamilton at 290,946 dollars. Despite having the second and third highest percent increases respectively over the previous decade, housing in Kingston and Sudbury was still quite affordable compared to the GTA. The average price in Kingston was 242,729 dollars in 2009 while in Sudbury it was 200,947 dollars. The lowest prices? Well, Windsor and Thunder Bay at about 154,000 and 138,000 dollars respectively.</div>
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Figure 3</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlbUMiCVXhqLurQvvFWkEf6vkN1m_18pX1J5TcZH9CafkYIyf_wHTfszza5CNGH-tBw9YdUwdg8b2N0CgVauoF0_6a4DPMp4ZNf6dxqz5JSTZVnqfNbCJLojdbBvhwbbxHwSUo1YX7fpuU/s1600/preview_slide1-52.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlbUMiCVXhqLurQvvFWkEf6vkN1m_18pX1J5TcZH9CafkYIyf_wHTfszza5CNGH-tBw9YdUwdg8b2N0CgVauoF0_6a4DPMp4ZNf6dxqz5JSTZVnqfNbCJLojdbBvhwbbxHwSUo1YX7fpuU/s320/preview_slide1-52.jpg" width="320" /></a> </div>
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What is interesting about Thunder Bay and Sudbury is that in 2000, their average prices were almost identical – at 109,811 dollars for Thunder Bay and 109,262 dollars for Sudbury. If you treat a house as an investment asset, returns have been much better in the Sudbury market than the Thunder Bay market over the last decade. Of course, what is truly amazing is that even in cities where there was a lot of economic damage during the recession, housing prices still rose. In these major centres, housing appears to have been a recession proof investment. Is this a sign that there has been a departure from fundamentals and that there is a bubble?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/canfield_takes_the_lead_on_regio/"><b>Canfield Takes the Lead on Regional Autonomy</b></a></div>
<ul class="ul1">
<li class="li11"><span class="s3">Jun 14, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/regional+autonomy/"><span class="s2">regional autonomy</span></a></span></li>
</ul>
<div class="p4">
David Canfield, the Mayor of Kenora came out and stated that economic development in Northern Ontario requires that the North have more autonomy within Ontario. According to a report on <a href="http://www.tbnewswatch.com/news/Default.aspx?cid=150479"><span class="s2">Thunder Bay Television news</span></a>, on Tuesday morning during the second day of the Think North II conference in at the Victoria Inn Canfield stated: "If we could drive the policy, if the policies could be made in Northwestern Ontario for Northwestern Ontario I guarantee our economy would booming," and then proceeded to add:"Get Queen’s Park out of our face. Let us drive the policies not people driving policies that know very little or nothing about us."</div>
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Good for him. It is about time our regional leaders spoke up and not unexpectedly its someone from one of the smaller towns who has shown the courage. In my years of interacting with regional politicians, I've always been impressed on how much more open to action and ideas the mayors of smaller places like Kenora, Greenstone, Dryden and Atikokan were compared to the metropolis of Thunder Bay. Politicians in Thunder Bay have always seemed inordinately preoccupied by what Toronto thinks of them whereas politicians outside of Thunder Bay always seemed more comfortable with who they were and what they wanted. This was certainly my observation during my participation with the Regional Recovery Committee which published the report "Enhancing the Economy of Northwestern Ontario" in 2007 and developed the concept of a <a href="http://www.northernontarioregion.ca/default.asp?pgid=82"><span class="s2">Northwestern Ontario Regional Development Authority</span></a> (NWORDA). NWORDA would have been an agency charged with regional development but was not pursued by the province and its demise should have been met with more regional outrage. Nevertheless, if the desire for more regional autonomy resurrects NWORDA, it would be a good start. Canfield's comments are also a good start. Let's see if these sentiments carry over into the Sudbury Summit.</div>
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<b>18 Posts from June 2011</b></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/canada_s_housing_market_still_bu/"><b>Canada's Housing Market Still Bubbling Away</b></a></div>
<ul class="ul1">
<li class="li3">Jun 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/bubbles/"><span class="s2">bubbles</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing/"><span class="s2">housing</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+estate/"><span class="s2">real estate</span></a></li>
</ul>
<div class="p4">
There has been alot of renewed interest in Canada's real estate market and whether or not it is immersed in a speculative bubble that once burst will provide homeowners with a soaking financial bath. Indeed, Mark Carney, Governor of the Bank of Canada, will be in Vancouver tomorrow and is apparently scheduled to give a talk that will discuss Canada's real estate market. What better place to do this than Vancouver which has seen its prices soar to astronomical levels. In the United States, which saw its housing bubble burst, there was an interesting analysis and discussion by Robert Shiller in Sunday's New York Times titled the "<a href="http://www.nytimes.com/2011/06/12/business/economy/12view.html"><span class="s2">Sickness Beneath the Slump</span></a>". After increases of 10 percent a year for a decade, U.S. home prices tumbled 34 percent between 2006 and 2011 and they still appear to be falling. This decline according to Shiller is a significant long-term ingredient into the U.S. economic slump. The real estate boom was fueled by an exuberant optimism and expectation that prices would continue to rise and that optimism combined with rising asset values in turn fueled the rest of the economy. I suppose just as optimism amplifies upturns into bubbles, pessimism can prolong a slump. Canadians consider themselves so much more prudent and yet average housing prices have soared dramatically in most Canadian cities. Prices have even gone up in smaller centres like Thunder Bay, Moncton and Sudbury though not as dramatically as my most recent post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/06/are-canadas-housing-markets-overvalued.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a> illustrates. When a simple price/earnings measure for Canadian real estate is constructed, many Canadian cities are in a range that if it was a stock market valuation, it would be considered a speculative bubble. It will be interesting to hear what Mark Carney says tomorrow. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/making_change__a_northern_declar/"><b>Making Change: A Northern Declaration</b></a></div>
<ul class="ul1">
<li class="li6"><span class="s3">Jun 10, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/change/"><span class="s2">change</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+declaration/"><span class="s2">northern declaration</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/regional+government/"><span class="s2">regional government</span></a></span></li>
</ul>
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Next week's summits in Thunder Bay and Sudbury still seem to be suffering from divergent points of opinion as to what their purpose is. On the one hand, the province has billed it as a Think North II Summit which implies yet another consultation. Northwestern leaders as embodied by the Joint Task Force (JTF) see it as a Regional Economic Planning Zone Pilot Project Summit and some of their background reports suggest they are looking for more devolution of decision making authority. Perhaps the JTF is not making its point strongly enough because it is not being very assertive in its language. At the risk of coming across as yet another academic postulating from their ivory tower, let me suggest that perhaps at next week’s Think North II Summit in Thunder Bay there needs to be a change in thinking on the part of the region’s leaders. Rather than enjoy a couple of days off from their day jobs savoring snacks and participating in yet another facilitated consultation that generates more reports as an input into yet another consultation, it is time for our political leaders to make a difference. Rather than sit through yet another workshop whose questions have been designed by Queen’s Park, the participants to this conference should take a page out of history, find a tennis court to gather on, and make a Northern Declaration that:</div>
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The peoples of Northern Ontario, making common cause to ensure a better future for our children in this land we call home, have come together in partnership to speak and act with one voice. We assert that Northern Ontario constitutes a distinct economic, social and geographic space within Ontario as embodied by its historic development. We assert that Ontario’s North requires innovative institutional change that gives it the economic development tools to manage its own lands and forests, its energy costs, its transportation infrastructure and by extension, its people’s well being. We declare that such change requires the establishment of autonomous self-government institutions for the North within Ontario. We pledge today to begin the work needed to bring about regional governance in the North, for the North, and by the peoples of North. We invite the Government of Ontario to join us in this new future. </div>
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This institutional change is not economic planning zones but autonomous regional <br />
government for the North within Ontario. Come out and say it. At minimum, there should be established one government for the province's<br />
Northwest and another for the Northeast reflecting the vast geographic differences of the North. A regional government for the Northwest can begin its work by planning and implementing transportation infrastructure to access the Far North and the Ring of Fire, design a regional energy grid and more competitive electricity prices, stop treating Crown Lands as a scarce resource and opening more up to cottage development, and help invest in water treatment plants, schools and training facilities, and medical facilities in First Nation communities. </div>
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Functions to be devolved onto a northern regional government<br />
may include economic development, environment and energy, municipal<br />
affairs, natural resources, social services, transportation, culture and tourism. Human capital investment such as health care and<br />
education can remain at the provincial level because of individual <br />
mobility and access concerns and the need for common standards but the case can also be made for regional administration of health and education because of distinct regional needs and conditions – particularly in the case of First Nations. Naturally, the<br />
transfer of these functions will be accompanied by the transfer of an<br />
appropriate own source revenue base. This can be done through the transfer of points from the Harmonized Sales Tax as well as the provincial income tax combined with resource rents. Bringing about regional government and new institutions for the North that enable it to take control of its economic future would be the defining event of the 21<span class="s4"><sup>st</sup></span> century for this region. Our region’s political leaders can either continue to be supplicants at Queen’s Park, or they can assert their own vision. An election year is the time to do it. After decades of endless consultation, what is there to lose? The worse that can happen is the province will say no and force them to sit through another consultation next year after the election.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/new_vision_for_northern_ontario/"><b>New Vision for Northern Ontario</b></a></div>
<ul class="ul1">
<li class="li3">Jun 8, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north/"><span class="s2">north</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
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Next week is the Think North II Summit designed to bring together decision makers and opinion leaders in yet another consultation emanating from the one Northern Growth plan to rule them all that was forged and tempered in the fires of Queen's Park by the Ontario government. According to the recent update from the Ministry of Northern Development and Mines, The Think North II Summit is "an opportunity for northerners to be actively engaged in shaping the framework for regional economic planning areas in Northern Ontario" and will feature hands-on workshops on "crafting a vision for regional economic development planning in Northern Ontario" as well as create "strategies for collaboration." There will even be the obligatory S.W.O.T. analysis to identify the strategies, weaknesses, opportunities and threats of the "change" represented by regional economic planning. The "threat" of change is a particularly amusing concept given that this entire process continues a process of consultation that has been ongoing for decades with not much change. To date, the major obstacles to change in the North have been the policies of the provincial government itself which have hampered the ability of the region to take charge of its own development. Never mind regional economic planning, a regional government for the North with power over economic and resource matters is decades overdue. </div>
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A close inspection of the agenda also shows that there is still no mention of the other "Northern Plan" that was recently introduced by the Quebec government. Can we learn something from Quebec? The Ontario government apparently thinks not. An interesting workshop of the Summit is the one called Vision 2021 which is described as: "The year is 2021. The Regional Economic Development Planning Areas are functioning well and Northern Ontario communities are prospering. Describe what is happening in northern communities". It would appear that the Northern Growth Plan is already a success! Time travel to 2021 has occurred and the report back is that the North is prospering. I had always suspected that the Ring of Fire was really an inter-dimensional time portal administered by Stargate Command.</div>
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Vision for the North requires more concrete action and less planning. If you don't want to take my word for it, visit the following post on <a href="http://www.republicofmining.com/2011/06/08/mining-marshall-plan-for-northern-ontario-%E2%80%93-stan-sudol/"><span class="s2">Stan Sudol's Republic of Mining</span></a> which advocates a "Mining Marshall Plan" for Ontario's North. The Marshall Plan was designed to rebuild Europe after the Second World War. That we need a Marshall Plan for the North suggests we need to be rebuilt after decades of less than satisfactory provincial economic and development policies.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_on_the_golden/"><b>Northern Economist on the "Golden Age"</b></a></div>
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<li class="li3">Jun 8, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/golden+age/"><span class="s2">golden age</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provincial+revenues/"><span class="s2">provincial revenues</span></a></li>
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From the June 8th, 2011 <a href="http://www.winnipegfreepress.com/"><span class="s2">Winnipeg Free Press</span></a> - PRINT EDITION</div>
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<b>1998-2008: Golden Age to Govern</b></div>
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By: Livio Di Matteo</div>
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When future generations of Canadians look back on the early years of the 21st century just prior to the Great Recession, they will realize what a truly special time this was for the funding of government programs and especially public sector health.</div>
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Over the period 1998-2008, the median annual growth rate for real per capita public health spending was 2.4 per cent. However, real per capita provincial government spending net of health also grew, though at a lower median rate of 1.8 per cent. As well, government program spending actually grew faster than revenues, yet many governments managed budgetary surpluses.</div>
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The last decade has witnessed the power of the fiscal dividend. Balanced budgets and low interest rates reduced the burden of debt service costs on government and afforded a fiscal dividend that allowed them to both lower corporate and income tax rates and increase spending.</div>
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Much of this dividend was poured into public health care spending, although other areas of government spending such as education also benefited.</div>
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Moreover, a growing economy and tax base managed to expand revenues even with lower tax rates. Federal finances, for example, improved so much that they were able to increase health transfers to the provinces at six per cent a year while lowering corporate and personal tax rates as well as the GST rate from seven to five per cent.</div>
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As for the provinces and territories, their total revenues grew from $388 billion to $633 billion between 1998 and 2008.</div>
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The Great Recession and its large deficits have brought this short Golden Age to an end. Public debt has mounted dramatically and the only saving grace has been historically low interest rates.</div>
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The prospect of rising interest rates, however, means that the fiscal dividend is poised to work in reverse in a replay of the 1980s. Higher interest rates and large deficits will lead to mounting debt and debt service costs, which will then squeeze government program spending.</div>
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At first, areas other than health will bear the brunt of the cuts but eventually there will be spillover into the health sector as there was during the fiscal crisis period of the early 1990s.</div>
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Despite the perception of inexorable rises in health care spending, during the period from 1990 to 1996, real per capita public health care spending actually declined -- evidence that when push comes to shove, governments do reduce health spending.</div>
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All this is relevant to the current debate on the sustainability of public sector health care spending. Often, the argument is made that the substantial personal and corporate tax cuts of the last decade have eroded the resources available to pay for public health care. As a result, the perception is that rising health care expenditures have meant fewer resources for other government programs but the reality is more surprising.</div>
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The rising tide of the fiscal dividend raised all boats -- but some more than others.</div>
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The period from 1998 to 2008 is unique because the fall in interest rates reduced government debt service costs and allowed for resources to be diverted to both health care spending and tax reduction with money left over for other program increases.</div>
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Whereas in 1998, the debt interest share of provincial government spending in Canada was 14 per cent, by 2008 it had fallen to 8.5 per cent, freeing up resources that allowed governments to hit multiple targets.</div>
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In the wake of the Great Recession, however, with its lower GDP growth and the return of large public sector deficits, this fiscal dividend foundation for rising health spending is crumbling and will not be a basis for future expenditure growth. In a sense, governments will no longer be able to have their cake and eat it too. Some provinces will weather the coming storm better than others. Alberta and Saskatchewan, for example, actually reduced their net debt over the last decade.</div>
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Other provinces have not done as well. The Great Recession caused most provinces to pile on substantial debt -- Manitoba included.</div>
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Between 2007-08 and 2009-10, Manitoba increased its net debt by 16 per cent. Other provinces have increased their net debt by even more -- for example, Ontario by 26 per cent and British Columbia by 24 per cent. The consequences may indeed be serious as interest rates creep up and the fiscal dividend fades into history.</div>
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Livio Di Matteo is a professor of economics at Lakehead University.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_leads_in_april_build/"><b>Thunder Bay Leads in April Building Permits Data</b></a></div>
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<li class="li3">Jun 6, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/building+permits/"><span class="s2">building permits</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sudbury/"><span class="s2">sudbury</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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The April building permit numbers are out from <a href="http://www.statcan.gc.ca/daily-quotidien/110606/t110606a3-eng.htm"><span class="s2">Statistics Canada</span></a> and they show that the value of permits in the Canadian Census Metropolitan areas for period April 2010-April 2011 is down by 18.1 percent. However, as the accompanying figure shows, Thunder leads the annualized April numbers with the top growth rate of 328.9 percent. The value of permits issued in Thunder Bay was 7.7 million dollars in April of 2010 and 32.9 million dollars in April of 2011. The other major Northern Ontario centre of Greater Sudbury was also up over the same period but only by 4.2 percent. April saw permit values fall in more than half of Canada's census metropolitan areas. The value of building permits fell 21.1% to $5.3 billion in April, after increasing 16.8% in March and 9.8% in February. The non-residential and residential sectors both declined in April, with Ontario posting the largest decrease. It would appear that the recovery is still sputtering along in Ontario given that springtime is usually when there is a pick-up in construction activity.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgt1XskQjbQ9kKCJ6wyZIHgOlAliKYrYrX6RCpxk3T4RdyZKd1dqUvTyCt-Q116d5tcFnRFG1T3FjdRMe4XvmbE2_lAylM4WplRfnFFiQMQdfp5Sd8NOneceMsbqR118t-fRH5igR9nxoF9/s1600/slide1-48.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgt1XskQjbQ9kKCJ6wyZIHgOlAliKYrYrX6RCpxk3T4RdyZKd1dqUvTyCt-Q116d5tcFnRFG1T3FjdRMe4XvmbE2_lAylM4WplRfnFFiQMQdfp5Sd8NOneceMsbqR118t-fRH5igR9nxoF9/s320/slide1-48.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_end_of_the_wheat_board_monop/"><b>The End of the Wheat Board Monopoly: A New Era for the Port of Thunder Bay?</b></a></div>
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<li class="li6"><span class="s3">Jun 6, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canadian+wheat+board/"><span class="s2">canadian wheat board</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/duluth/"><span class="s2">duluth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/grain+shipping/"><span class="s2">grain shipping</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/port/"><span class="s2">port</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/shipping/"><span class="s2">shipping</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></span></li>
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It was announced May31st by Canadian Wheat Board Chair Allen Oberg that the Canadian Wheat Board’s (CWB) monopoly of marketing spring wheat, durum and barley crops will come to an end in August 2012. Technically speaking, this is also ending a monopsony as the wheat board is a single buyer of wheat from farmers. This is an important moment in Canadian economic history as it marks the first time since World War II that farmers of wheat, durum and barley will not be required to sell their crops through the board. There is a long history of prairie farmers lobbying for changes to the buying and selling of wheat. The creation of the Wheat Board in 1935 and the wheat pools in the 1920s were rooted in farmers seeking to get the highest possible price for their crop and therefore maximize their income. Farmers supported the creation of the Wheat Board in 1935 because they believed a monopoly seller on world markets would get them the best possible price. Decades later, those prairie farmers who wanted the monopoly ended believe that they can do better in a more competitive market despite the more consistent returns often provided by the wheat board monopoly.</div>
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The marketing monopoly will end for all three crops at the same time, rather than in phases and it can be expected to affect the Port of Thunder Bay. When the monopoly ends, companies such as Canada Malting Co. Ltd., Cargill Inc., Mission Terminals Inc., Parrish & Heimbecker Ltd., Richardson International Ltd., Viterra Inc., and Western Grain By-Products Storage Ltd. that have facilities in the Port of Thunder Bay will be able to buy directly from farmers instead of going through the Wheat Board. </div>
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What will the impact be on Thunder Bay and its port? Canadian Wheat Board shipments apparently account for sixty percent of the Port’s overall cargo tonnage while grain overall is about seventy five percent of overall tonnage. As the accompanying figure shows, total tonnage has been in decline since the 1980s and if this change reduces tonnage, it could be a severe blow to the port. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifkjUJAwetNPYkTl7-l6a9BEdtHCUHwgHlsCKarDMSQuHTkJMAGzWFXsOHrKCGeRt-wZ0iqJ375eymhfpaNRVagXFifgWsTbvkcuER7-UFTNdrPrwphmmXqj78D9D_iUBd1iGVEEtnrf1U/s1600/preview_slide1-46.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifkjUJAwetNPYkTl7-l6a9BEdtHCUHwgHlsCKarDMSQuHTkJMAGzWFXsOHrKCGeRt-wZ0iqJ375eymhfpaNRVagXFifgWsTbvkcuER7-UFTNdrPrwphmmXqj78D9D_iUBd1iGVEEtnrf1U/s320/preview_slide1-46.jpg" width="320" /></a> </div>
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How things work out will now depend on the ability of the Port of Thunder Bay to compete for the business of farmers relative to the Port of Vancouver, Prince Rupert, Churchill, as well as American ports such as Duluth-Superior. There is also the Mississippi route down through to New Orleans and the Gulf of Mexico. In a sense, this is new territory and the outcome difficult to predict given that this type of competition has not existed since the 1930s. However, given that everyone now has to compete, it is a new playing field and does represent an opportunity for the Port to compete for business and increase its grain tonnage. </div>
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The demise of the Wheat board monopoly will probably have a bigger impact on Churchill than the Port of Thunder Bay as it is more dependent on Wheat Board grain shipments than Thunder Bay. Nevertheless, Thunder Bay already ships about ten times more grain than Churchill, which means any additional business taken away from Churchill will be modest in its impact on Thunder Bay. Thunder Bay will need to compete more aggressively with its sister port, the "American Lakehead" of Duluth-Superior as the accompanying figure shows. Duluth-Superior has experienced a drop in tonnage and vessels using its port over the last few years and you can be sure they will be keen to generate additional business.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvBzkKkPQBj1mISyP0QamU30esirvD-X7qp8Pfpkoo6GVspwKLIx7qQAsDGGcdCFqcCiYaTp112CJECHBvk7t7b3S-gTZD2FuftsYYSB-1Tt7tbi5D-h5IF9hojmrIocAs3ZODjdkJBHF4/s1600/preview_slide1-47.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvBzkKkPQBj1mISyP0QamU30esirvD-X7qp8Pfpkoo6GVspwKLIx7qQAsDGGcdCFqcCiYaTp112CJECHBvk7t7b3S-gTZD2FuftsYYSB-1Tt7tbi5D-h5IF9hojmrIocAs3ZODjdkJBHF4/s320/preview_slide1-47.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/transfer_growth__ontario_in_the_/"><b>Transfer Growth: Ontario in the Lead</b></a></div>
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<li class="li3">Jun 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ottawa/"><span class="s2">ottawa</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/"><span class="s2">provinces</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transfer+payments/"><span class="s2">transfer payments</span></a></li>
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Being in the nation’s capital can have an exhilarating effect when it comes to fiscal matters. It was a beautiful day in Ottawa today and I walked around the Parliament buildings before dinner and after dinner as I reflected on the Confederation Flame flickering on Parliament Hill, I began thinking about all the money that Ottawa transfers to the provinces. Inspired, I decided to quickly download the 2010 Fiscal Reference Tables and calculated per capita provincial federal cash transfers for the last ten years as well as their percent growth. The results were quite interesting. There is a definite east-west gradient with the biggest per capita recipients being the four Atlantic provinces but then there is Manitoba. Indeed, Manitoba is definitely not like the other western provinces when it comes to transfers - it is more akin to the Atlantic ones. </div>
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What is also interesting is the growth in per capita federal cash transfers over the 1999-2009 period. The biggest growth was for Ontario – which grew 179 percent - from 511 to 1425 dollars per capita. Next was Alberta, and then Quebec followed by British Columbia and Manitoba. Indeed, it appears that many of the provinces are engaged in a game of federal transfer catch-up with Atlantic Canada. Only Saskatchewan and Newfoundland exhibited muted growth over this ten year period. With Ontario's superlative growth in transfers, it appears to have come a long way in redressing the fiscal imbalance. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaVdwhLxewS5g4W_Gp8S8lCiFEgBzFyXdAS1o7AzK0_qiCqTU8JIEXXFB-QnmH4f-kN239NkddORUZz470p36XGO_LToZhKtFI8vCe-a3dTdxVWYLBoJS-8OomwUVSjfRmnikmE3gVH9Gs/s1600/slide1-44.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaVdwhLxewS5g4W_Gp8S8lCiFEgBzFyXdAS1o7AzK0_qiCqTU8JIEXXFB-QnmH4f-kN239NkddORUZz470p36XGO_LToZhKtFI8vCe-a3dTdxVWYLBoJS-8OomwUVSjfRmnikmE3gVH9Gs/s320/slide1-44.jpg" width="320" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi72YVkA6G4GSg9whRpYYrjpR-HYj4fqljr3bnJEspT0p9pxuNu62DA7_ftV44hf1-i5iVrzxLNxyaroYlv5darMLX3WgdSW5ypRc_yBNlWfO7nIwtrup8YJWhdmM3Rj5YGlMfQy4hXkoV_/s1600/slide1-45.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi72YVkA6G4GSg9whRpYYrjpR-HYj4fqljr3bnJEspT0p9pxuNu62DA7_ftV44hf1-i5iVrzxLNxyaroYlv5darMLX3WgdSW5ypRc_yBNlWfO7nIwtrup8YJWhdmM3Rj5YGlMfQy4hXkoV_/s320/slide1-45.jpg" width="320" /></a></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_ottawa/">Northern Economist in Ottawa</a></b></div>
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<li class="li3">Jun 1, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canadian+economics+association/"><span class="s2">canadian economics association</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ottawa/"><span class="s2">ottawa</span></a></li>
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Well, I'm off to Ottawa for the annual meetings of the <a href="http://economics.ca/2011/en/"><span class="s2">Canadian Economics Association</span></a>. There will be hundreds of economists from all over Canada, North America and indeed around the world and am certainly looking forward to meeting new people and renewing connections with old colleagues. I will be involved in a number of sessions both as a presenter and a discussant. If you are interested in some of my current research in the areas of financial and wealth history or health care sustainability, please visit my university web page <a href="http://economics.lakeheadu.ca/dimatteo/work.html"><span class="s2">Working Papers</span></a> section for drafts of the conference papers. Have a great week.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-7767671408494920392016-12-14T13:56:00.004-08:002017-05-28T05:49:16.052-07:00May 2011 Posts<div class="p1">
<b>16 Posts from May 2011</b></div>
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<b><a href="http://ldimatte.shawwebspace.ca/blog/post/public_health_programs/">Public Health Programs</a></b></div>
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<li class="li3">May 31, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+health/"><span class="s2">public health</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/spending/"><span class="s2">spending</span></a></li>
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Public health spending as a share of public sector health expenditures has grown dramatically in recent years especially as a result of concerns with SARS and H1N1. Historically, public health measures such as immunization and clean water technologies have been responsible for much of the twentieth century mortality decline. Today, there are new public health issues such as obesity and environmental factors and their influence on health. Visit my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/05/spending-on-public-health-programs-yet-another-national-divide.html"><span class="s2">Worthwhile Canadian Initiative</span></a> for a discussion of differences in per capita funding for these programs across the provinces and what it might mean.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/fixing_ontario_s_public_finances/"><b>Fixing Ontario's Public Finances</b></a></div>
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<li class="li3">May 29, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/budget/"><span class="s2">budget</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s2">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+plans/"><span class="s2">fiscal plans</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
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Election season is rapidly approaching in Ontario and it will be accompanied by plans and proposals to deal with Ontario’s deficit, which according to the last provincial budget was 16.7 billion in 2010-11 and is projected to decline to 15.6 billion by 2011-12. Needless to say, with these kinds of deficits, the net public debt will soon break the 250 billion dollar mark and generate debt service costs that will eat into program spending. </div>
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How to fix Ontario’s public finances? Well, what must be addressed is the balance between revenues and expenditures. As Figure 1 shows, a major gap opens up after 2007. Over the period 2001-2011, total expenditures grew at an average annual rate of 6.3 percent while revenues have grown at an average annual rate of 4.7 percent – an unsustainable trend. However, one should probably factor out the Great Recession, which brings the average annual growth rates for 2001 to 2007 to 6 percent for expenditures and 5.7 percent for revenues – still unsustainable. Clearly, the expenditure growth rate needs to fall or the revenue growth rate needs to rise or some combination thereof. </div>
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<b>Figure 1</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilo2GrErUpF6qCQur3tnu1G-lCgoowqI2BCqjVGM4Ib70KCt8FxVJO8pGoJT1GGCQuvIAZv6fxbhJhhn27UPyfZMuSNyRkKDrFFaRRhI9Nqn1bghttcZMS59_Ow591koocZwS3lSeCuXoV/s1600/preview_slide1-43.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilo2GrErUpF6qCQur3tnu1G-lCgoowqI2BCqjVGM4Ib70KCt8FxVJO8pGoJT1GGCQuvIAZv6fxbhJhhn27UPyfZMuSNyRkKDrFFaRRhI9Nqn1bghttcZMS59_Ow591koocZwS3lSeCuXoV/s320/preview_slide1-43.jpg" width="320" /></a></div>
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What might some possible scenarios look like? I have three scenarios outlined below in Table 1. Scenario 1 assumes that revenues and expenditures will grow at the average annual rates of the 2001-2007 period. Clearly, this does not solve the deficit problem at all despite growing revenues. Scenario 2 has an initial 2 percent spending cut in 2012 followed by annual expenditure growth of 3 percent and less optimistic annual revenue growth of only 4 percent. This does a better job of shrinking the deficit but by 2017 there is still a 3.7 billion dollar deficit. Scenario 3 has a three-year spending freeze followed by 3 percent expenditure growth and overall revenue growth of 4 percent a year. By 2016, the budget is balanced with a small surplus while by 2017 the surplus has grown to 1.7 billion dollars. Of my three options, this is my preferred option in that it solves a big problem in a measured fashion but avoids the pain of big explicit budget cuts (though there will be reductions due to inflation).</div>
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<a href="http://ldimatte.shawwebspace.ca/asset/view/36694/slide1-41.jpg/"></a><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5tC18L3B0TFhIqzqyHGay8xwslIMi6LXVRZyNexnGinlC0angIuj143J4_qm8UxLcPxtKY6Brk9voKxosPKXR5VZHSFVJ74X12lJ0aGlcmOlXAcyq0zhHeKbOIw3cJo30WtQWEEqRnmqC/s1600/slide1-41.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5tC18L3B0TFhIqzqyHGay8xwslIMi6LXVRZyNexnGinlC0angIuj143J4_qm8UxLcPxtKY6Brk9voKxosPKXR5VZHSFVJ74X12lJ0aGlcmOlXAcyq0zhHeKbOIw3cJo30WtQWEEqRnmqC/s320/slide1-41.jpg" width="320" /></a></div>
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How do these scenarios compare to what is currently being proposed by the government and the official opposition? The provincial Liberals plan to eliminate the deficit by 2017-18 by holding program expense growth to about 1 percent a year between 2010-11 and 2012-14, combined with initiatives to improve public service delivery. The revenues and expenditures under their plan are presented in their most recent budget and amounts to average annual revenue growth of about 4.6 percent and average annual total expenditure growth of about 2.2 percent. As well, the 1 billion dollar contingency reserve fund is accorded to expenditures.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkCZ8ksujmqhG9K3XKeBHG42TBKlIwPgL0Xvs0AWbYLvp51k-Hmbfk6Nywp1oN3oHJUeTaC9qhyB11B4LVC-MSy3YLFTvrXv6M0jg5xsBkrnhuz1SSOmy1ZScMCQ9_Beaiib539HVduYSr/s1600/slide1-42.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkCZ8ksujmqhG9K3XKeBHG42TBKlIwPgL0Xvs0AWbYLvp51k-Hmbfk6Nywp1oN3oHJUeTaC9qhyB11B4LVC-MSy3YLFTvrXv6M0jg5xsBkrnhuz1SSOmy1ZScMCQ9_Beaiib539HVduYSr/s320/slide1-42.jpg" width="320" /></a></div>
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The Progressive Conservatives propose cutting Ontario government spending by about 2 percent a year on programs outside of health until the budget is balanced by about 2017-18. This only amounts to cutting about 600 million dollars a year or a total of about 3.6 billion dollars over 6 years. This will also be accompanied by a total of 3.7 billion dollars in new spending which taken together essentially means an overall spending freeze. The PCs also propose tax relief by scrapping a number of fees, removing the 8 percent provincial portion of the HST on electricity and home heating bills, and reducing income taxes, which the Conservatives say will amount to about a 3.5 billion dollar tax reduction – or about a 3 percent drop in revenue. Based on these numbers, I’ve also simulated revenues and expenditures based on this plan but assuming a lower the average annual revenue growth rate of 4 percent after the 3 percent revenue drop.</div>
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Table 2 compares the two scenarios. It would appear that both scenarios eliminate the deficit by 2017 with the Progressive Conservative scenario actually showing a 3.8 billion dollar surplus. Aside from this, by 2017, the Liberal Scenario involves 13 percent more spending and 11 percent more revenue. They have produced what could be termed a more “expensive” plan to reduce the deficit. By 2017, the government’s footprint in the Ontario economy will be smaller under the Progressive Conservative plan. The Liberals, however, have asserted that the Progressive Conservative plan actually involves a much larger gap than the 3.5 billion dollar revenue drop, which would place the ability to eliminate the deficit by 2017 in question. As well, one must concede that a plan that essentially freezes overall spending for six years is probably unlikely to last very long given that elections are every four years. Of course, none of these scenarios can predict what exogenous shocks may hit either revenue or expenditures - the future is inherently unpredictable. Still, the positions have been staked out. I think I still like my own Scenario 3 plan better.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_in_2041_-_population/"><b>Thunder Bay in 2041 - Population 144,000!</b></a></div>
<ul class="ul1">
<li class="li9"><span class="s3">May 25, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/aboriginal/"><span class="s2">aboriginal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/change/"><span class="s2">change</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/non-aboriginal/"><span class="s2">non-aboriginal</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/opportunity/"><span class="s2">opportunity</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/"><span class="s2">population</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></span></li>
</ul>
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The release of the <a href="http://www.uaps.ca/"><span class="s2">Urban Aboriginal Peoples Study</span></a> by the Environics Institute reveals that as of the 2006 Census, half of Canada’s aboriginal population lived in urban centres. Thunder Bay was one of the 11 cities examined in the report and the report shows that between 2001 and 2006, the aboriginal population in the Thunder Bay Census Metropolitan Area (CMA) grew by 23 percent – from 8,205 in 2001 to 10,055 in 2006. This represents an annual growth rate of 4.1 percent and is responsible for the overall growth of the Thunder Bay CMA’s population between 2001 and 2006 given that the non-aboriginal identity population shrank by one percent over the same period (for an annual growth rate of minus one-fifth of one percent).</div>
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This is important information because if these growth rates are applied to the aboriginal and non-aboriginal populations and extrapolated forward, they show that Thunder Bay’s population is actually going to increase significantly over the next thirty-five years. Applying these crude growth rates to population starting in 2006 and carrying forward to 2041, finds that the aboriginal population would reach 41,035 by 2041 while the non-aboriginal population would continue a slow decline and reach 103,447 people. This is shown in the accompanying Figure constructed using these growth rates. Adding the two figures produces a total population for the Thunder Bay CMA of 121,050 in 2006 and 144,482 by 2041. In other words, under these simple assumptions, Thunder Bay’s population is not going to decline but rather will actually increase by almost 20 percent.</div>
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Of course, this projection is crude and does not take into account the age structure of the population, birth and death rates, and the potential for other exogenous shocks and changes due to in or out-migration. This is a simple extrapolation based on a five-year growth rate assuming all other things constant. Nevertheless, it is a vision of a future of growth and change. A growing population signals economic opportunity and a reversal of the population stagnation of the last couple of decades. At the same time, there will be a compositional change in the population with these numbers suggesting an increase in the aboriginal share of the Thunder Bay CMA from 8.3 percent in 2006 to 28 percent by 2041. Moreover, the aboriginal population will be much younger than the non-aboriginal population meaning that they will have to be a crucial part of the future labour force. The success of the growing aboriginal population in acquiring secondary and post-secondary education – human capital – will be crucial to the future success of Thunder Bay’s economy and probably the most important future challenge facing our region.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo57kNaAoZUR2LKGjI7zcW6MVLhBOmyYmOsuTBY0QT2AqqvOphCm1fYK5UYZRIWtwE49CdU8yQV_ubmj9bOfcK4MgYjiCd17r65BbvhQE4m7bmqgEeB-8XYCXjSHG_h2tzJ70JJT4dILhs/s1600/preview_slide1-39.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjo57kNaAoZUR2LKGjI7zcW6MVLhBOmyYmOsuTBY0QT2AqqvOphCm1fYK5UYZRIWtwE49CdU8yQV_ubmj9bOfcK4MgYjiCd17r65BbvhQE4m7bmqgEeB-8XYCXjSHG_h2tzJ70JJT4dILhs/s320/preview_slide1-39.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thinking_about_the_north__too_ma/"><b>Thinking About the North: Too Many Planners or Too Many Plans?</b></a></div>
<ul class="ul1">
<li class="li9"><span class="s3">May 23, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/cedc/"><span class="s2">cedc</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/confusion/"><span class="s2">confusion</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ctb/"><span class="s2">ctb</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/cvnw/"><span class="s2">cvnw</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+development/"><span class="s2">economic development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/jtf/"><span class="s2">jtf</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/jtf2/"><span class="s2">jtf2</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mndm/"><span class="s2">mndm</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/more+confusion/"><span class="s2">more confusion</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/nac/"><span class="s2">nac</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/nodn/"><span class="s2">nodn</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/noma/"><span class="s2">noma</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/npit/"><span class="s2">npit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/planning/"><span class="s2">planning</span></a></span></li>
</ul>
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The process of Northern Ontario economic development has recently taken an even more convoluted turn given what seems to be a proliferation of task forces, steering committees and summits in the wake of the release of the Northern Growth Plan and the recent provincial budget. There has been a call for the establishment of “pilot economic development planning areas” in Northern Ontario and regional leaders here in the Northwest decided that there needed to be another group to steer this process and formed the Joint Task Force (JTF) on Northwestern Ontario Economic Development Planning. The JTF (not to be confused with JTF2 which is the Canadian Armed Forces Special Operations Force) is to play a lead role in developing a proposed model and implementation plan for regional economic planning in northwestern Ontario. </div>
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The JTF joins the Northern Ontario Development Network (NODN), the Northwestern Ontario Municipal Association (NOMA), the City of Thunder Bay (CTB), Common Voice Northwest (CVNW) and the Thunder Bay Community Economic Development Commission (CEDC) together to begin a process with counterparts in Northeastern Ontario who no doubt also have a large number of organizations with confusing acronyms. In addition, The Ministry of Northern Development and Mines (MNDM) is establishing a multi-stakeholder Northern Advisory Committee (NAC) that will provide input into the establishment of regional economic development planning zones. The NAC will work with JTF and the Northeast Pilot Implementation Team (NPIT) to develop regional planning models as well as provide advice on the Northern Growth Plan.</div>
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All of these groups will come together for summits to be held in Thunder Bay, June 13-14 and Sudbury June 15-16 to lay the groundwork for best practices in economic planning. According to NOMA Vice President Iain Angus (who is also Chair of JTF and a Councilor-at-Large for CTB) “We are working hard to make sure this is not just another ‘Think North’ “ and that “It is imperative that we leave the Summit with a clear indication as to what the Northwest wants the Pilot Project to look like.” On the other hand, a memorandum to Northern Ontario partners and stakeholders from the Ministry of Northern Development and Mines (MNDM) dated May 20<span class="s4"><sup>th</sup></span>, 2011 invites everyone to register for the “much anticipated Think North II Regional Conference” that is designed to “put great ideas into action with workshops designed to help shape two pilot regional economic development planning areas…in the northeast…the northwest.” Perhaps there are some aspects of the role of the summit that still need to be ironed out between MNDM and JTF. Incidentally, the great ideas for Think North II will be coming from keynote speakers being brought in from Ireland, Scotland, New Zealand and Alaska. For Think North I in 2009, the speakers came from the United States, British Columbia, Australia and Finland. Too bad they are not bringing in a speaker from Quebec who can talk about the 2.1 billion dollars that is planned to be invested in Quebec’s North under their Plan Nord.</div>
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What is one to make of all this? Let us leave aside the issue of whether you can actually have government officially plan economic development, something that some feel was settled with the fall of the Berlin Wall. After all, economic development requires the private sector to take a major role albeit with the infrastructure support and institutional facilitation of government. But what government will it be? </div>
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What is rather confusing about all this that they are going to discuss regional economic planning but there is currently no regional institutional infrastructure within which to plan. How do you plan regionally without the tools to implement anything regionally? Aside from a perpetually simmering alphabet soup of groups, there is no regional framework for implementation of regional decisions. Everything is currently centralized at Queen’s Park and implemented via the provincial government and its ministries. </div>
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For example, how do we regionally plan land use policy to foster economic development when the provincial government essentially makes those decisions for us as recently witnessed with the Far North Act or the forest tenure reforms? Is the provincial government planning to bring about regional government to deal with economic development as a follow-up to these planning meetings? JTF says local decision-making is one of its priorities for regional economic planning. The best you can decipher from MNDM is that “We look forward to working with the NAC, local implementation teams and other interested northern groups to shape an approach to regional economic development planning that is reflective and responsive to the circumstances of Northern Ontario.” Local decision making versus shaping an approach – that seems to be two vastly different points of view but then the confusion is understandable given the plethora of plans and planning groups. Where is a common voice when you need it?</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/capital_cities_and_economic_domi/"><b>Capital Cities and Economic Dominance</b></a></div>
<ul class="ul1">
<li class="li3">May 19, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/dominance/"><span class="s2">dominance</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+growth/"><span class="s2">economic growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/toronto/"><span class="s2">toronto</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urbanization/"><span class="s2">urbanization</span></a></li>
</ul>
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When we discuss urban centers and development in Ontario, we are often told that cities are engines of growth and that Toronto in particular is Ontario’s economic engine. The implication of course is that Toronto needs special policies and attention from the provincial and federal government to ensure that Toronto continues to be an important economic engine. That Toronto is an important economic engine for both Ontario and Canada is not in dispute. Toronto, for example accounted for about two-thirds of the building permits issued in Ontario in March and the GTA accounts for nearly half of Ontario’s employment. With a Census Metropolitan Area (CMA) population of nearly 5 million, Toronto is Ontario’s (and indeed Canada’s) largest city and other Ontario cities have fallen well behind. This dominance has grown over the course of the twentieth century as Ontario once had a more dispersed and balanced pattern of urban development. In 1951, the Toronto CMA accounted for 27 percent of Ontario’s population while today it accounts for 40 percent.</div>
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However, can there be too much of a good thing? Can a dominant urban center by virtue of its institutional monopoly on a country or region’s economy and political life extract economic rent from the surrounding countryside and ultimately kill the goose that laid the golden egg? Alan Beattie, in his False Economy: A Surprising Economic History of the World, discusses urban centers and growth and mentions the combination of large cities that are political capitals, which gives them the “ability to punch well above their political weight”. Historical examples show that in capital cities, it is difficult to ignore the wishes of the disgruntled, because their proximity makes them difficult to ignore. Beattie points out that in strong democracies, it makes little difference where “malcontents” live but in weak democracies it can be a critical factor especially if they live in a large urban center that is also a capital. The classic example is probably imperial Rome where rent was extracted from an entire empire to maintain the urban population with bread and circuses.</div>
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Of course, Canada is a stable modern democracy not given to urban mobs seeking to overthrow the government. Yet, the potential relationships are interesting ones. Does having a large share of population residing in the capital city create an environment of economic rent seeking that siphons resources from the rest of the economy into the capital via public spending and regulations that ultimately weaken aggregate economic performance? Canada’s provinces vary quite a bit in terms of the provincial population share accounted for by the capital city from a high of 59 percent in Manitoba to a low of 8 percent in British Columbia. Provinces where at least one-third of the population lives in the provincial capital include Newfoundland & Labrador, Nova Scotia, Ontario, Prince Edward Island and Manitoba. With the exception of Newfoundland and Labrador with its new resource opportunities, none of these provinces have been particularly stellar performers recently in terms of GDP growth. Provinces with strong second and third cities aside from the provincial capital – for example, Alberta, Saskatchewan, British Columbia and Quebec – may have a more competitive urban environment, which fosters innovation and growth.</div>
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In the case of Toronto, its economic dominance within Ontario combined with the concentration of government and media make its issues everyone’s issues. While some of this attention is justified, one cannot help wondering if it is out of proportion to actual needs. Case in point - education. In Ontario, the last decade has seen numerous closures of smaller elementary and high schools across the province. Oddly enough, in Toronto, the boards have not only managed to keep more schools open but also maintained funding longer for things like <a href="http://www.thestar.com/News/GTA/article/621857"><span class="s2">swimming pools</span></a> and <a href="http://news.nationalpost.com/2011/05/16/teacher-librarians-a-dying-breed-as-boards-make-room-for-technology-report/"><span class="s2">teacher-librarians</span></a>. Apparently, 19 percent of schools in Eastern Ontario and 10 percent of schools in northern Ontario have teacher librarians compared to 92 percent in the GTA schools. This is an odd distribution given that education in Ontario is now highly centralized in terms of both funding and policy. Did close proximity to the provincial decision makers create opportunities for advocacy not available outside the capital? Moreover, is Toronto’s dominance and the decline of rural and remote regions a self-fulfilling prophecy when so many of the policy makers and opinion leaders influencing the government are in Toronto and able to make their voices heard? These are vital questions for not just Ontario, but indeed all of Canada.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/new_hotels_in_thunder_bay__a_sle/"><b>New Hotels in Thunder Bay: A Sleepover Economy?</b></a></div>
<ul class="ul1">
<li class="li9"><span class="s3">May 18, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/accommodation/"><span class="s2">accommodation</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s2">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hotels/"><span class="s2">hotels</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/travel/"><span class="s2">travel</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/waterfront/"><span class="s2">waterfront</span></a></span></li>
</ul>
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Thunder Bay City Council has <a href="http://www.tbnewswatch.com/news/146386/Hotel-idea-flies"><span class="s2">given its blessing to a hotel project</span></a> - a 75 room "mid-luxury" Hampton Inn that will be built on land leased from the Thunder Bay International Airport Authority. Coming on the heels of an announcement that another developer wishes to build a new hotel on city-owned land at the corner of Junot and John Street, one is left with the impression that a local boom in hotel building is underway. As well, by some accounts, the new multiplex may also come with a hotel project. This is reinforced by the fact that over the last few years a new Days Inn has been constructed just adjacent to the regional hospital on Junot while another Days Inn was recently built just off the intersection of Balmoral and the Harbour Expressway. And not that long ago a new Best Western went in near the intersection of the Expressway and Arthur Street.</div>
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While I recently opined that the opening of so many donut shops in the city seemed to herald the arrival of a "donut economy", I suppose I can now coin another term by asking if we are also acquiring a "sleepover economy". What explains all the new hotel construction? Could it be that so many people have moved from Thunder Bay over the years that they now need someplace to stay when they come back and visit? Not likely, given that our population is stable and will probably show a small increase once the next census is released. Besides, Thunder Bay born and bred people are thrifty and will stay with friends and family when they come back to visit. Hotels are for "the others".</div>
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The factors are likely rooted in the increased regional role the City plays in the region and the increased mining and resource development in the Ring of Fire. Travel to Thunder Bay is definitely up when you look at the activity at our airport as the accompanying graph illustrates. Data obtained from the Thunder Bay International Airport Authority shows a substantial increase in passenger volume over the last decade. Since 1998, the number of passengers has increased about 30 percent - despite the downturn in the forest sector. </div>
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Much of the increase is probably connected with travel for government and business purposes which in turn generates a demand for accommodation. In addition, Thunder Bay's medical and educational services also generate an inflow of people from outlying communities as well as the growing aboriginal population in the region and they also require temporary accommodation when visiting Thunder Bay. </div>
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Of course the really interesting observation is as follows. There has been a spate of new hotels either constructed or proposed by private sector entities. If the private sector wants to do something, it usually means they have done some homework and believe they can make a profit. They don't always get it right but by and large, if the private sector wants to build something, it likely means there is a solid economic or business foundation. So, why have we not yet heard an announcement about a new hotel on our new redeveloped waterfront by a private developer? There were gurgles that an announcement was imminent during the last municipal election (only about six months ago) and renewed musings early in the new year followed by mutterings that confidential discussions were underway. Yet, no new hotel has been announced on the waterfront. Other hotels announcements in other locations are coming up like flowers in spring and yet on the waterfront we are greeted by a silent spring. As Spock would say, "Fascinating".</div>
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<b>Figure</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOmmpLw4eibHW3CnDv_oPZ8oonA8PDAXHW4ND-9C52_W7xmbe8UwwKsL6dhDQUKOEK9HQ66KEGam2kmgmoaYf_s8-2ERqMtff_wqBS5jNtWAfxHUYU1lwQtMAWrmOTyNvtJfPDLL1gApKE/s1600/preview_slide1-38.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOmmpLw4eibHW3CnDv_oPZ8oonA8PDAXHW4ND-9C52_W7xmbe8UwwKsL6dhDQUKOEK9HQ66KEGam2kmgmoaYf_s8-2ERqMtff_wqBS5jNtWAfxHUYU1lwQtMAWrmOTyNvtJfPDLL1gApKE/s320/preview_slide1-38.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_s_economy/"><b>Thunder Bay's Economy</b></a></div>
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<li class="li3">May 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/development/"><span class="s2">development</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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<b>Thunder Bay’s Economy: Another View</b></div>
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This originally appeared in the Thursday May 12th edition of the Thunder Bay Chronicle-Journal.</div>
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By Livio Di Matteo</div>
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While it has become the optimistic conventional wisdom to say that Thunder Bay’s economy is transitioning towards new opportunities in the knowledge and post-industrial sectors, there are some other trends that bear watching. It will be interesting to see what economic and demographic data the 2011 Census provides in the wake of the forest sector crisis and the transitioning economy. Employment, for example, has not returned to its pre-forest sector crisis level in Thunder Bay and this has undoubtedly affected income and more specifically the distribution of income. </div>
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Many of the workers who lost their jobs in the forest sector are obviously not working and if they are it is likely they are earning lower incomes. Given the erosion of well paying industrial employment, Thunder Bay’s economy appears to be transitioning into a sector of well-paying and relatively secure knowledge economy, public sector and professional employment and then a very large service and support sector whose employment and earnings are much more precarious. In the long run, this should be reflected in retail and commercial development. One should expect to see a split into high end and low end commercial and retail establishments with very little left in the middle.</div>
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The trend appears to be underway with the proliferation of donut shops and fast food accompanied by the expansion of higher end restaurants. Nowhere is this more starkly evident than at the corner of Junot and Oliver where the new higher end Five Forks Restaurant shares a parking lot with the adjacent brand new Subway Restaurant. Both of them have a neighbour across the street in the form of the ubiquitous Tim Horton’s donut shop. Indeed, when it comes to economic development, Thunder Bay has not only moved beyond the industrial economy but also past the knowledge economy into what can be only termed a donut economy. An old friend of mine used to be curious if one could actually run an economy on the recirculation of income from donut shops with everyone eating and spending at everyone else’s shop. My answer now is Thunder Bay could well be an experiment in progress.</div>
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Based on a quick Google search, Thunder Bay currently seems to have 15 Tim Horton’s locations and another 16 Robin’s locations. There is a major donut franchise for every 4,000 people in the city and the number of shops only seems to be growing. Tim Horton’s may be considering yet another store on the vacant property on the northeast corner of John and Junot, that would be accompanied with a new hotel! Of course, there already is a Robin’s just metres away on John as well as the Tim Horton’s on Junot and Oliver but the City of Thunder Bay will likely re-zone the land because they are desperate for any revenue they can get. </div>
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New hotels seem to be the other feature of Thunder Bay’s transition and it is difficult to pinpoint where the demand for accommodation is coming. One possibility is the increased regional role of the City when it comes to health and government services for the smaller outlying communities as well as the expanding regional aboriginal population. More and better quality data on all these trends would be useful. Hopefully, that will be a role of the new policy institute the provincial government has promised us, though everything appears to once again be quiet on that front.</div>
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In the end, the decline of the industrial base is a major feature of Thunder Bay’s economic transition and it has placed an increasing burden on residential taxpayers. As a result, the City of Thunder Bay grabs any opportunity to sell off land and get it developed. Who can blame them given their reluctance to reduce their spending. At this point, any reduction in City spending would probably have a major employment impact given the number of municipal workers the City of Thunder Bay now employs. As for those who live adjacent to yet another planned Tim Horton’s, the moral of the story is in Thunder Bay, you should never buy a house near green space without checking out who owns the land. Just ask the people who live out near the Norwesters.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_on_manitoba_s/"><b>Northern Economist on Manitoba's Economy</b></a></div>
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<li class="li3">May 17, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/"><span class="s2">gdp</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/manitoba/"><span class="s2">manitoba</span></a></li>
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From the Winnipeg Free Press - PRINT EDITION-May 17th, 2011, p.A10.</div>
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<b>Manitoba lagging in recovery, earnings</b></div>
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By: Livio Di Matteo</div>
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Last year, when the provincial GDP growth numbers were released for 2009, Manitobans basked in the news that despite the storm of the great recession, Manitoba was Canada's economic growth leader. Of course, the Manitoba economy did not grow at all in 2009 but then everyone else's economy shrank.</div>
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When it comes to economic performance, everything is relative. Statistics Canada has released the preliminary provincial growth numbers for 2010 but the news has been buried by the fascination with royal wedding as well as the federal election.</div>
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It is probably just as well. The results are not as favourable for Manitoba this year.</div>
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While Manitoba led the country during the economic downturn, it is lagging the country when it comes to the recovery's upturn. While Canada's real GDP growth for 2010 is estimated to be about 3.3 per cent, Manitoba's comes in at two per cent, which places it at the bottom tied with Prince Edward Island -- also at two per cent -- and just behind Nova Scotia at 2.1 per cent.</div>
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While Manitoba's performance is steady, the fact is being a leader when times are bad and growth low but a follower when times are good and growth high is not the best recipe for long-run economic performance.</div>
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The explanations for this performance vary. One explanation, as put forward by the Manitoba Bureau of Statistics, is the number is simply an underestimate and when the final numbers are in, the growth rate will be revised upwards.</div>
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Indeed, the Manitoba government forecasts the economy in 2011 is expected to grow at a more respectable 2.7 per cent and 2010 should come in at 2.5 per cent.</div>
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If that is the case, however, Manitoba will still rank at the bottom because every province's numbers are going to be revised. This explanation only works if there is something systematically different about how Statistics Canada estimates Manitoba's GDP and that is not likely.</div>
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Is there something different about Manitoba's economy? Manitoba and Saskatchewan are still highly dependent on agriculture. One of the reasons both their performances were weaker in 2010 was due to a fall in crop production as a result of bad weather.</div>
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This in turn can also especially affect manufacturing in Manitoba as much of the manufacturing sector is tied to food processing and agricultural equipment.</div>
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The weather has also affected economic growth in the United States recently as the winter storms in the first quarter of 2011 helped slow economic growth there to 1.8 per cent.</div>
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If one compares Manitoba's economic growth in 2010 with that of nearby North Dakota, however, one finds North Dakota grew at 3.5 per cent, more than twice the rate of Manitoba's economy.</div>
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One can point to the fact that despite the lower GDP growth rate, Manitoba's employment is up and employment and labour-force growth is ranked fifth- and second-best among the provinces respectively.</div>
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Weekly earnings in 2010, however, were up only two per cent and below Canada's increase of 3.6 per cent. Having superior growth in employment but not in earnings suggests the labour force may be lagging in terms of its productivity.</div>
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So what is happening in Manitoba? Several things.</div>
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First, productivity in Manitoba is lagging other parts of the country and while more jobs are being created, their productivity contribution is not robust. This is a long-term problem best dealt with over the long run with improved investment in human capital and training.</div>
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Second, Manitoba's economy is still very dependent on agriculture both as a primary production sector as well as an input into manufacturing. Bad weather in 2010 helped slow that sector down and with the flooding of 2011, the new crop year is probably not getting off to the best start.</div>
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The economic impact of weather is more problematic as government policy cannot change the weather. One solution may be to encourage more agricultural production in products that are less affected by the weather. Apparently, wheat has not done as well recently whereas receipts for hog production are up.</div>
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Another solution is to further diversify the manufacturing sector into non-agriculturally related production and further diversify the economy into service and knowledge-sector activities.</div>
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This, however, is where the private sector also needs to take a leadership role as wealth creation is ultimately a private-sector activity and government incentives can only follow where the private sector sees opportunity.</div>
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Livio Di Matteo is a professor of economics at Lakehead University.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/housing_starts_data/"><b>Housing Starts Data</b></a></div>
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<li class="li3">May 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing+starts/"><span class="s2">housing starts</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
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The <a href="http://www.conferenceboard.ca/"><span class="s2">Conference Board of Canada</span></a> recently released its May 2011 edition of Metropolitan Housing Starts and it provides housing start data for Canada's census metropolitan areas. They report that 15 out of 27 markets have posted a year over year (April 2010 to April 2011) decline in housing starts. The two figures below summarize the numbers for the Ontario CMAs. In terms of total seasonally adjusted annual housing starts, Toronto currently leads the statistics with over 44,000 housing starts while Thunder Bay comes in last with only 217 (Figure 1). This is of course a difference due to the scale of the urban economies being compared. If one looks at the year over year percentage change to gauge growth rates, Kingston, St. Catharines, Thunder Bay, Toronto and Windsor are up this spring while all other Ontario cities are down when it comes to housing starts (Figure 2). Thunder Bay is up 39 percent from last April and in terms of percent change is third highest in Ontario and the sixth highest amongst Canadian CMAs. </div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgczDjqZ2rznASAbgqQd6HrgLBT7Tw9k3BqS7apXDOxSLsVwij8t3-CGU0yHzWl9aN0AHvqCnace3HnmK0zY3XqdK9XuLGo-I96fFEULYD139bKLsKzZMz346J4ceXtQvZF7_jSXyktAsfu/s1600/preview_slide1-37.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgczDjqZ2rznASAbgqQd6HrgLBT7Tw9k3BqS7apXDOxSLsVwij8t3-CGU0yHzWl9aN0AHvqCnace3HnmK0zY3XqdK9XuLGo-I96fFEULYD139bKLsKzZMz346J4ceXtQvZF7_jSXyktAsfu/s320/preview_slide1-37.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/cross-border_shopping__the_next_/"><b>Cross-Border Shopping: The Next Frontier</b></a></div>
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<li class="li3">May 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/cross-border+shopping/"><span class="s2">cross-border shopping</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/exemptions/"><span class="s2">exemptions</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/retail/"><span class="s2">retail</span></a></li>
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Residents of Thunder Bay have long crossed the U.S. border to shop in Duluth in far greater numbers than cross the other way from the United States despite the more generous exemptions Americans have. Indeed, those exemptions may be about to change. According to a report in the May 11<span class="s4"><sup>th</sup></span> edition of the Globe and Mail, the U.S. government is pressing the Canadian federal government to loosen the rules so that fewer Canadians have to stop and pay duties as they return from a trip to the United States: “The personal exemption issue has been formally raised by the United States trade representative,” an official with the U.S. embassy told The Globe and Mail on Wednesday.</div>
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According to the Globe and Mail story: “The message is that the U.S. believes that both countries have a lot to be gained by reducing trade barriers in general. And there is work to be done on both sides to achieve that goal.” Of course, the U.S. government is raising this in the context of national security, that is: “Border inspectors need to spend less time looking for extra bottles of duty-free whisky and more time trying to identify people who might be a genuine threat.” It would appear from the sub-text of this story that the Obama administration is concerned that terrorists might enter Canada from the United States which is certainly a reversal of the general American attitude regarding terrorists and Canada. In reality, the higher Canadian dollar is encouraging more Canadians to shop in the United States and a larger exemption is good for border businesses.</div>
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Apparently, legislation recently reintroduced in Congress calls for the United States to raise the amount Americans can bring back customs-free from Canada – even on a day trip – to $1,000 from $200. In contrast, Canadian law does not waive any taxes or duties for items purchased on a day trip. A 24-hour stay is required for a waiver on up to $50 (not including tobacco and alcohol). That amount rises to $400 for a 48-hour stay and $750 for a week-long visit. Why does this concern the federal government? Well, preliminary data from Statistics Canada show Canadians spent $18-billion in the United States last year – a 14.5 per cent jump from 2009 and nearly 40 per cent more than in 2006. The concern in Ottawa is that making these trips any easier on Canadian wallets will hurt retailers at home and mean less sales-tax revenue. Oddly enough, lowering the GST rate also reduced sales tax revenue and apparently has not deterred Canadians from visiting the United States. </div>
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The cross-border shopping saga is a long one in Canada and as the accompanying figure shows, despite the recent increases in spending by Canadians in the United States, trips are no where near their peak in 1991. The fact is that same day auto trips by Canadians to the United States have actually been flat over the last five years or so. What has increased in the number of one or more night trips and we are obviously spending more per trip. Canadians have gotten around the low exemption amount they can bring back by simply going to the United States longer enabling them to spend more and bring more back. Really, who can blame us? Ninety percent of our population lives within one-hundred kilometers of the border and U.S. cities are often closer than Canadian ones. Indeed, in Thunder Bay, the closest major city to us is Duluth and it is a four hour drive away. Moreover, many of our retailers in Canada are American anyway but charge higher prices because they are obviously able to get away with it in the Canadian market. Canadians, it seem are willing to pay more in Canada and those who don’t cross-border shop. If anything, more cross-border shopping may provide some pressure on retailers in Canada to lower prices.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvQVi3DFVAHpK2QyJWETvcAAVlAcRoDTrUnQZuuYCvNRpajwroiu0NIsRnlXbm_9YUff-p_k5AU7axA5PviUe0q38DNJBqlg8OGGnfDi3XLk4BX_f3cH7i3yn6rYLVWmVPJqmdoNFU_PpP/s1600/preview_slide1-36.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvQVi3DFVAHpK2QyJWETvcAAVlAcRoDTrUnQZuuYCvNRpajwroiu0NIsRnlXbm_9YUff-p_k5AU7axA5PviUe0q38DNJBqlg8OGGnfDi3XLk4BX_f3cH7i3yn6rYLVWmVPJqmdoNFU_PpP/s320/preview_slide1-36.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/well__i_think_i_was_called_a_lia/"><b>Well, I Think I Was Called a Liar!</b></a></div>
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<li class="li3">May 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipal+politics/"><span class="s2">municipal politics</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/zoning/"><span class="s2">zoning</span></a></li>
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It was an interesting exercise in neighborhood participatory democracy that I attended this evening at the Boys and Girls Club on Junot. Members of the neighborhood turned out to discuss the proposed sale and development of a forested lot of city-owned land at the corner of Junot and John. Also in attendance were Mayor Hobbs and Councillors Ruberto and Mackinnon. </div>
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The essence of the issue seems to be as follows: the City of Thunder Bay has a conditional agreement of sale on a piece of land in the middle of a residential area to a developer who wants to build a mega Tim Horton's and a future hotel on the property. The City rezoned the land in 2010 from residential to Neighborhood Centre 3 to make it more attractive to developers and by extension make the property more attractive to buyers via additional uses. The City benefits from the sale first in the revenue from the sale but also from the conversion of the property into a productive piece of tax-paying property. The neighborhood gets increased traffic and congestion at an intersection that is already prone to frequent accidents. The debate was quite spirited though in the end given that the property was already rezoned to NC3 in 2010, ultimately the issue is whether the City will rezone the land to permit the bigger Tim Horton's and a hotel. If the developer had not applied for the rezoning, the land could have been sold quietly and an albeit smaller Tim Horton's constructed there anyway.</div>
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My major points at the session were: 1) If the purpose of locating the new EMS station on Junot (just up from this piece of land) was to improve response times, how did creating more traffic on the road contribute to improved response times for emergency vehicles and 2) There were a number of pieces of land in the city already that have been sold and were supposed to be developed and all that has happened is that their trees have been cut down and they have remained vacant for years and how does the City of Thunder Bay ensure the developers follow through. 3) The development could likely reduce my property value, not that property values here have been going anywhere over the last twenty years. No one tackled my first or third points but Councillor Ruberto in response to my second comment proceeded on a rambling explanation of how the City had many things to balance and that included generating tax revenues through land sale. When I assertively asked if this meant that the City then did not care what happened to a piece of land they sold as long as it generated revenue, Councillor Ruberto responded rather heatedly that I had made a "false statement".</div>
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Councillor Ruberto has a reputation of being a rather frank and direct fellow but if he publicly states I have made a false statement then he is basically calling me a liar. That is particularly disturbing behaviour for a politician - if you don't like what someone is saying, then either say or insinuate they are not telling the truth. The fact is, the City rezoned the land from residential to commercial uses so that they could eventually sell it and generate revenue. It was obviously a successful process as they now have a conditional sale which, lo and behold, will generate revenue. Given the failure to place conditions on rapid development of a property after sale so that it lies deforested and vacant means they either don't care what happens to it or are not forward thinking enough to follow through. Why that analysis constitutes a "false statement" is beyond me. I could ask for an apology but I won't because I already know that being a politician in Thunder Bay probably means never having to say you are sorry.</div>
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P.S. To aspiring politicians everywhere, the following advice. When faced with a constituent whose views you disagree with, correct responses may include "I do not agree with you" or "I think your analysis may be flawed" or the completely innocuous "That is an interesting point". Telling them they have made a false statement is probably not a good idea.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/plan_nord_versus_grow_north__que/"><b>Plan Nord Versus Grow North: Quebec's Northern Policy Trumps Ontario's</b></a></div>
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<li class="li3">May 9, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+growth+plans/"><span class="s2">northern growth plans</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/plan+nord/"><span class="s2">plan nord</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/quebec/"><span class="s2">quebec</span></a></li>
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Quebec has just announced its own northern growth plan and it appears to be more focused and concrete in resource allocation terms than the recently released Ontario Northern Growth Plan. Ontario’s Northern Growth Plan was “a call to action and a roadmap for change” organized to provide policy direction for growth around six principles: (1) a globally competitive economy, (2) education and skllls for a knowledge economy, (3) aboriginal partnership, (4) networks of social, transport and communications infrastructure, (5) sustainable environment and (6) innovative partnerships to maximize resource potential. The plan had detailed checklist for short, medium and long-term actions that required implementation and of course more planning including regional plans within the region. Indeed, if one could summarize the Ontario plan, it is simply a plan to rule all plans and the planning is not over yet. The major resource announcements that accompanied it were 5 million dollars for a policy institute (on which little has been said since) and a few million dollars to begin integrated transport planning.</div>
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Contrast this to Quebec’s vision for its own north, which is being touted as “<a href="http://www.plannord.gouv.qc.ca/"><span class="s2">The Project of a Generation</span></a>”. According to Premier Charest "The Plan Nord is ambitious. Its implementation will necessitate essential investments to facilitate access to the territory and enhance the quality of life of its inhabitants. The new business model developed in respect of projects under the Plan Nord has unquestionably altered the manner in which Québec will fund infrastructure and public services. Starting today, construction and maintenance costs will be shared throughout the infrastructure's useful life by businesses, the communities concerned, the gouvernement du Québec and other users." </div>
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Indeed, the Quebec government is establishing a crown corporation – the Societe du Plan –to carry out projects and coordinate all of the investments. The government corporation will oversee the public investments in the social and transportation infrastructure sectors. The first action plan under the Plan Nord covers the period 2011-2016, during which the gouvernement du Québec will implement measures totaling $2.1 billion. Of this amount, nearly $1.2 billion will be earmarked for infrastructure development and $382 million for social measures related to housing, health, the reduction of transportation costs, and education. In addition, Investissement Québec will manage a special $500-million allocation to enable Quebecers to acquire equity participations in investment projects in the North. This phase is apparently only the beginning. The Plan Nord will be carried out over 25 years and lead to 80 billion dollars in investment and create on average 20,000 jobs per year in energy, mining, forestry, transportation and infrastructure to develop Quebec’s vast northern region. The mining portion alone of this plan is being touted as the largest natural resource project in Quebec since the hydroelectric development of the 1970s. </div>
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Plan Nord may be part hype and the future implementation remains to be seen but it seems a lot more focused than the vapid prognostications set out in Ontario’s plan. The tone of the entire plan is dynamic. The Plan Nord is “The Project of a Generation” that sets forth a new investment frontier while Ontario’s Grow North Plan is to quote:” in part an economic development plan, an infrastructure investment plan, a labour market plan and a land-use plan. It is a plan that recognizes the interconnected contribution of people, communities, infrastructure and the environment to a successful and sustainable economy. It is a plan that recognizes and builds upon the unique characteristics of Northern Ontario, including a bilingual workforce in many communities.” No doubt, the Quebec government at minimum has access to better marketing consultants than the Ontario government. Quebec’s Northern Policy seems to trump Ontario’s in both tone and content. Quebec has said oui a un Nord qui ose! Ontario is still planning to plan.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/resource_rents__the_ring_of_fire/"><b>Resource Rents, the Ring of Fire and the Future</b></a></div>
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<li class="li3">May 9, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/endowments/"><span class="s2">endowments</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/resources/"><span class="s2">resources</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ring+of+fire/"><span class="s2">ring of fire</span></a></li>
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American historian David Potter’s book People of Plenty argued that resource abundance shaped the American attitude towards possibility and opportunity. Abundant resources set the stage for wealth accumulation and created a society that believes that everyone can become rich through their own work and effort and that initiative and opportunity are the key to social mobility and success. In Canada, we also have a tradition of resource abundance but it has generated not so much an ethos of aggressive individualism but one of more government involvement in the economy. Indeed, the resource rents from natural resources have played a role in government finance whether it was late nineteenth century Ontario’s forest sector (which generated at its peak 20-25 percent of provincial government revenues) or energy in Alberta and Newfoundland and Labrador today. </div>
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As Herb Emery and Ron Kneebone have recently written in Alberta’s Problems of Plenty (<a href="http://www.irpp.org/po/issue.php?month=May&year=2011"><span class="s2">May 2011, Policy Options</span></a>), in the Alberta context the main role of resource abundance and resource rents has been to augment both private and public consumption. Emery and Kneebone detail how the heavy reliance on resource exploitation carried with it the problem of large swings in economic activity – boom and bust – which can play havoc with health and education spending if short-term resource revenues are funding unsustainable increases in program spending. They argue that the solution to this problem is to redirect revenues from natural resource rents away from current government operating budgets and into savings. This would build endowments that would fund spending in the future in a stable pattern pointing to the successful employment of this approach by energy rich Norway. Alberta has only saved about 10 percent of the natural resource revenue it has collected whereas Norway has saved over 90 percent.</div>
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Such a policy appears to have eluded not only Alberta, but indeed, most Canadians who at various points in their history have been the beneficiaries of major resource booms. Why we have been unable to save and invest a larger share of our natural resource rents over the last century is an interesting question. Given that personal saving rates have also declined over the last two decades, do Canadians in general simply have a high rate of time preference - that is, they prefer immediate gratification? We used to have higher savings rates before. Could it be Canadians preferred the benefits of natural resource revenues to accrue to current consumption so that they could save more privately? Perhaps the best way to save and invest resource rents is to dedicate the endowment fund for a particular purpose. We may be averse to simply stockpiling resource revenues into a general fund. Why not create dedicated public endowments out of natural resource revenues– like one for health care, one for education, etc… In the case of health care, this could be a form of pre-funding health expenditure. Provinces like Alberta, Saskatchewan and Newfoundland & Labrador are certainly well positioned to try this out. </div>
<div class="p4">
In Ontario, the proposed Ring of Fire may also generate new resource rents down the road. Given that one hundred years of forestry and mining revenues were never used to generate a public endowment, perhaps we might try and get it right this time. During the period from 1870 to 1920, resource rents from forestry and mining in Ontario - in particular, Northern Ontario - generated a large chunk of the revenue for the provincial government which fueled public expenditures that benefited all Ontarians. If even a portion of this money had been invested in a permanent fund for the North, today it would be a massive endowment that could fund projects in the North on a permanent basis. The Northern Ontario Heritage fund that currently exists is but a pale imitation of such a fund because it relies on the government continually committing funds for it out of its operating budget. As the North's population share shrinks and our influence diminishes, one day the budget for the Heritage fund could simply vanish. With the Ring of Fire, there will again be substantial resource rents. We should advocate and plan now so that a share of these revenues are ploughed back into a permanent regional endowment to fund regional infrastructure and service for the long haul.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/building_permits_data_released__/"><b>Building Permits Data Released: Ontario Recovery Led by Toronto</b></a></div>
<ul class="ul1">
<li class="li3">May 5, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/building+permits/"><span class="s2">building permits</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a></li>
</ul>
<div class="p4">
Statistics Canada has just released its <a href="http://www.statcan.gc.ca/daily-quotidien/110505/dq110505a-eng.htm"><span class="s2">building permit statistics for March 2011</span></a> and they show that the total value of permits issued by municipalities in Canada is up in March by 17.2 percent over February at a level that has not been seen since June 2007. Much of the gain is apparently due to residential and non-residential sector activity in Ontario. Year over year (March 2010-March 2011) Ontario is up by 37 percent with residential permits up 16.5 percent and non-residential permits up by 71.2 percent. However, an examination of the year over year permits by Ontario Census Metropolitan Area (CMA) suggests that much of the growth is concentrated in the Toronto area especially given the size of the Toronto CMA. In March 2011, Toronto accounted for about two-thirds of the value of building permits issued in Ontario. The year over year value of permits is actually down in Thunder Bay, London, Guelph, Brantford, Kingston, Hamilton, Peterborough and even Ottawa. Windsor and Oshawa appear to be on the mend in the post auto-sector downturn world. For the Northern Ontario CMAs, Sudbury is up 141 percent while Thunder Bay is down by 43 percent.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq9A-PYy9L5I1IJL7j54PhhiKb6XKgcYu9I-eECEWk_ZXWa4OLUuXQDhmSvZ-Vx5YI8rIoKuM2xNsdIgDAmRMwqclI3UhZF-CPd6p3cZk3Dw-WShHEoAIMpaSVeZqSoxhN5AGWLQv0iBYw/s1600/preview_slide1-35.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjq9A-PYy9L5I1IJL7j54PhhiKb6XKgcYu9I-eECEWk_ZXWa4OLUuXQDhmSvZ-Vx5YI8rIoKuM2xNsdIgDAmRMwqclI3UhZF-CPd6p3cZk3Dw-WShHEoAIMpaSVeZqSoxhN5AGWLQv0iBYw/s320/preview_slide1-35.jpg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/locating_the_multiplex/"><b>Locating the Multiplex</b></a></div>
<ul class="ul1">
<li class="li3">May 4, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/multiplex/"><span class="s2">multiplex</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban+development/"><span class="s2">urban development</span></a></li>
</ul>
<div class="p4">
According to a report in this morning’s CBC newscast, this coming Monday evening, Thunder Bay City Council will apparently be considering five potential locations for the location of the proposed new multiplex facility. That locations are being considered is interesting given that officially no decision has been made on whether or not there will be a new multiplex and that the new strategic plan, which will invariably include a recommendation for a multiplex, has not been completed yet. No doubt, our City Council is probably being pro-active and doing their due diligence by making sure that the logistics of location are considered prior to the final decision. After all, given the age of the Fort William Gardens, a replacement facility of some type is inevitable. As well, one can dryly observe that the experience of the Norwester windmills has probably reinforced the importance of considering location in advance when it comes to public projects.</div>
<div class="p4">
Where to locate the multiplex will in true Thunder Bay fashion result in a heated debate. Some elements of this debate have already surfaced in the local media with the Mayor suggesting that it go in the Simpson Street area to help revitalize that area whereas a recent Chronicle-Journal editorial has argued that the waterfront is a logical location. The Port Arthur-Fort William divide is apparently alive and well forty years after amalgamation. The recent flurry of road and access construction in the former Innova park area bounded by the Expressway, Harbour Expressway and Junot leads one to suspect that this may be the prime green field location the City has in mind given its neutral central location, wide open spaces and failure as an industrial park. A green field location is exceptionally attractive given the absence of adjacent neighborhoods and the likely availability of substantial parking space. However, given the progress made over the last twenty years in trying to locate more activities in the core areas, locating the new multiplex outside of a core area simply for the sake of parking would be a step backwards. It would also send an inconsistent environmental message given council’s previous preoccupations with bike paths and expensive alternate energy sources such as windmills. </div>
<div class="p4">
The multiplex is more than an arena for hockey – it is going to be a multiuse arena and convention facility that will feature sports, concerts, family shows, community events and conferences. The City’s own preliminary study of other such facilities found that out of 11 such facilities in cities of comparable size, 9 of them were in a downtown area and 7 were either on a waterfront or in close proximity. On balance, most places have opted for downtown/waterfront locations as part of a concerted strategy of urban development. Indeed, given the new waterfront development in the Marina Park development and the evolution of the North core as a tourism/entertainment area, functional coherence makes the area a logical location for the multiplex. Of course, parking will be more limited than on a green field site where suburban mall style parking lots can be made available. However, if you are trying to attract conventions, it only makes sense that you will be clustering activities in one location so as to create density and an exciting visitor experience. Surely, downtown arenas in these other cities offer examples of solutions to the parking dilemma?</div>
<div class="p4">
The location of the multiplex will be an important test of the new council’s vision and ability to make strategic decisions. The choice of a green field location because of lower construction and site preparation costs and parking considerations alone will indicate that not much has changed when it comes to decision making at City Hall. Such a decision will demonstrate that when it comes to long term urban vision and development, municipal government in Thunder Bay is strong on rhetoric and symbolic displays but weak on actual implementation. We shall soon see if in this major decision, City Council is going to be strategic if necessary but not necessarily strategic. </div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/the_federal_election_results__na/"><b>The Federal Election Results: National and Regional assessment</b></a></div>
<ul class="ul1">
<li class="li8"><span class="s3">May 2, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/assessment/"><span class="s2">assessment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+election/"><span class="s2">federal election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/results/"><span class="s2">results</span></a></span></li>
</ul>
<div class="p4">
With a Conservative majority government, one can expect to see a continuation of current federal economic policy with respect to lower corporate taxes, targeted spending programs, as well as a more explicit articulation of a philosophy of smaller and less intrusive government. The international investment community and financial markets will welcome this. On the other hand, while a majority government will be seen as stabilizing after the fractious minorities of the last two seven years, the move towards a more explicit two party system means the polarization of Canadian politics into more extreme policy positions that may generate longer term uncertainty about Canada. Should the Liberal Party decline be permanent, in the long run the choice between a Conservative or an NDP government may mean more abrupt policy shifts than the traditional choice between Liberal and Conservative governments which have tended to govern from the center. However, in the short term there will be little effective intellectual opposition to the Conservative majority. The NDP has a newly expanded caucus with the bulk of its members from Quebec and will be kept busy building an opposition role while the Liberals and the Bloc have been decimated. One point to watch will be transfer payments. The Conservative majority has been built on a coalition of Western and Ontario voters but is less well represented in the more transfer and equalization dependent regions. This may indeed signal a new regional divide in the Canadian federation based on regional wealth distribution.</div>
<div class="p4">
Here in Northwestern Ontario, there has been no change with Greg Rickford being returned in the Kenora riding for the Conservatives and John Rafferty and Bruce Hyer winning again in Thunder Bay-Rainy River and Thunder Bay Superior North. The region will have representation and input in a majority government but Thunder Bay will have opposition members as its representatives. However, the strong second place finish by Conservative candidates in both the Thunder Bay ridings should provide a signal to the government that there is a constituency for its policies in the region’s major center and should assist federal public infrastructure investment and other initiatives in the region. At the same time, we are no longer in a minority government situation and there is therefore less leverage to lobby the federal government with respect to regional spending and infrastructure projects. With respect to regional economic development such as the debate over the role of Fednor, one can expect that Fednor will not become a stand-alone agency and will remain a division of Industry Canada. Northwestern Ontario can expect things to continue pretty much as before but in the case of Thunder Bay with perhaps a little less interest from the Federal government than was exhibited over the last couple of years.</div>
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Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-79005085228787238622016-12-14T13:49:00.002-08:002017-05-28T05:48:54.816-07:00April 2011 Posts<div class="p1">
<b>20 Posts from April 2011</b></div>
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<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/an_aging_society__another_view/"><b>An Aging Society: Another View</b></a></div>
<ul class="ul1">
<li class="li3">Apr 29, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/aging/"><span class="s2">aging</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/"><span class="s2">health</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/human+accomplishment/"><span class="s2">human accomplishment</span></a></li>
</ul>
<div class="p4">
The debate over the sustainability of public health care has often focused on an aging population as one of the key drivers with apocalyptic scenarios of a silver tsunami of sick seniors washing over the health care system and bankrupting it. While health spending does rise with age, most academic studies have found that the determinants of spending are somewhat more complex with technological extension, inflation, and income growth being collectively more important drivers than age alone. However, aside from aging being a cost driver, it should also be viewed as a major human accomplishment. One of the remarkable achievements of the human species over the last 150 years has been the extension of the lifespan. Visit my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/the-debate-over-the-sustainability-of-public-health-care-has-often-focused-on-an-aging-population-as-one-of-the-key-drivers-w.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a> for a discussion.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_twitter_election_-_f/"><b>Thunder Bay Twitter Election - Final Update</b></a></div>
<ul class="ul1">
<li class="li3">Apr 28, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+election+2011/"><span class="s2">federal election 2011</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/politics/"><span class="s2">politics</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter+counts/"><span class="s2">twitter counts</span></a></li>
</ul>
<div class="p4">
Well, here we are with just four days to go until the Federal election so its time to go forward with one final Twitter follower update for the two Thunder Bay ridings as well as an update for the federal party leaders. Overall, the relative positions have been remarkably stable over the past month. For Thunder Bay Superior North (TBSN) Bruce Hyer (NDP) remains in the lead with 442 Twitter followers, up 4.2 percent since April 15<span class="s3"><sup>th</sup></span>. Yves Fricot (LIB) is in second place with 188 followers, up 22.1 percent since April 15<span class="s3"><sup>th</sup></span>. Unfortunately, neither Richard Harvey (C) nor Scott Kyle (G) had a Twitter account and remain at zero. For the Thunder Bay Rainy River riding (TBRR), John Rafferty(NDP) remains in the lead with 1184 followers, up 3.4 percent from April 15<span class="s3"><sup>th</sup></span>. Meanwhile, Ken Boshcoff(LIB) is in second place with 174 followers, up 10.1 percent since April 28<span class="s3"><sup>th</sup></span>. Ed Shields(G) is in third place with 242 followers but up 68 percent since April 15<span class="s3"><sup>th</sup></span> while Moe Comuzzi-Stehmann(C) is in last place with 38 followers, up 35.7 percent since April 15<span class="s3"><sup>th</sup></span>. Graphs comparing the distribution of votes from March 30<span class="s3"><sup>th</sup></span> to April 28th are also provided below.</div>
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<div class="p4">
<b>Table 1</b></div>
<table cellpadding="0" cellspacing="0" class="t1" style="width: 408.0px;">
<tbody>
<tr>
<td class="td1" valign="middle"><div class="p6">
TBSN</div>
</td>
<td class="td2" valign="middle"><div class="p7">
30-Mar</div>
</td>
<td class="td2" valign="middle"><div class="p7">
15-Apr</div>
</td>
<td class="td3" valign="middle"><div class="p7">
28-Apr</div>
</td>
<td class="td4" valign="middle"><div class="p6">
% Change Apr15-28</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Hyer</div>
</td>
<td class="td2" valign="middle"><div class="p7">
385</div>
</td>
<td class="td2" valign="middle"><div class="p7">
424</div>
</td>
<td class="td3" valign="middle"><div class="p7">
442</div>
</td>
<td class="td4" valign="middle"><div class="p7">
4.2</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Fricot</div>
</td>
<td class="td2" valign="middle"><div class="p7">
66</div>
</td>
<td class="td2" valign="middle"><div class="p7">
154</div>
</td>
<td class="td3" valign="middle"><div class="p7">
188</div>
</td>
<td class="td4" valign="middle"><div class="p7">
22.1</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Harvey</div>
</td>
<td class="td2" valign="middle"><div class="p7">
0</div>
</td>
<td class="td2" valign="middle"><div class="p7">
0</div>
</td>
<td class="td3" valign="middle"><div class="p7">
0</div>
</td>
<td class="td4" valign="middle"><div class="p7">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Kyle</div>
</td>
<td class="td2" valign="middle"><div class="p7">
0</div>
</td>
<td class="td2" valign="middle"><div class="p7">
0</div>
</td>
<td class="td3" valign="middle"><div class="p7">
0</div>
</td>
<td class="td4" valign="middle"><div class="p7">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p6">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p6">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p6">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p6">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
TBRR</div>
</td>
<td class="td2" valign="middle"><div class="p7">
30-Mar</div>
</td>
<td class="td2" valign="middle"><div class="p7">
15-Apr</div>
</td>
<td class="td3" valign="middle"><div class="p7">
28-Apr</div>
</td>
<td class="td4" valign="middle"><div class="p6">
% Change Apr15-28</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Rafferty</div>
</td>
<td class="td2" valign="middle"><div class="p7">
1089</div>
</td>
<td class="td2" valign="middle"><div class="p7">
1145</div>
</td>
<td class="td3" valign="middle"><div class="p7">
1184</div>
</td>
<td class="td4" valign="middle"><div class="p7">
3.4</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Boshcoff</div>
</td>
<td class="td2" valign="middle"><div class="p7">
137</div>
</td>
<td class="td2" valign="middle"><div class="p7">
158</div>
</td>
<td class="td3" valign="middle"><div class="p7">
174</div>
</td>
<td class="td4" valign="middle"><div class="p7">
10.1</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Comuzzi-Stehmann</div>
</td>
<td class="td2" valign="middle"><div class="p7">
0</div>
</td>
<td class="td2" valign="middle"><div class="p7">
28</div>
</td>
<td class="td3" valign="middle"><div class="p7">
38</div>
</td>
<td class="td4" valign="middle"><div class="p7">
35.7</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p6">
Shields</div>
</td>
<td class="td2" valign="middle"><div class="p7">
59</div>
</td>
<td class="td2" valign="middle"><div class="p7">
144</div>
</td>
<td class="td3" valign="middle"><div class="p7">
242</div>
</td>
<td class="td4" valign="middle"><div class="p7">
68.1</div>
</td>
</tr>
</tbody>
</table>
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<b>Figure 1</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwt0M58Ptp_XMF7HxvICE4ZbpIHNkNPjPAniJyUXwi9LHt9QE2OJxW1HgxRrEMm9mbi7LzAUazbAVpR-KBwwNUC0RPBsWa4KeI3aaxqirT-q2i85ovUH-G1jMKltwMttgMWtcyWGR2M20k/s1600/a_004.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwt0M58Ptp_XMF7HxvICE4ZbpIHNkNPjPAniJyUXwi9LHt9QE2OJxW1HgxRrEMm9mbi7LzAUazbAVpR-KBwwNUC0RPBsWa4KeI3aaxqirT-q2i85ovUH-G1jMKltwMttgMWtcyWGR2M20k/s320/a_004.jpeg" width="320" /></a></div>
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<b>Figure 2</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoUdMxuXC2IaLeExNZXTvp7mJOqj69-LkEBSPPZt5ftW66pxuZobjfzUGXnIxWdPHN0wpJG98YZmyZoX_XHbzzcx7F0XdGsjw8U3KedPGkYo2x7mciwPXy7Ko5ENQewSBya2OdzGAnsHPJ/s1600/a_008.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoUdMxuXC2IaLeExNZXTvp7mJOqj69-LkEBSPPZt5ftW66pxuZobjfzUGXnIxWdPHN0wpJG98YZmyZoX_XHbzzcx7F0XdGsjw8U3KedPGkYo2x7mciwPXy7Ko5ENQewSBya2OdzGAnsHPJ/s320/a_008.jpeg" width="320" /></a></div>
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Does this really tell us anything about how the election might shape up locally on May 2<span class="s3"><sup>nd</sup></span>? Based on the overall number of Twitter followers, it would appear that the NDP are poised to take the two ridings again. However, the final outcome may be closer and more uncertain than anyone expects because Twitter is not a random poll but a summation of people who are probably committed to the candidate – why else would they be a follower? People who choose to register as followers are likely already supporters and all the Twitter count probably is in the end is an estimate of core support. How those who have not registered on Twitter are going to vote is more problematic and based on casual observation of the “sign wars” the race in both ridings appears to be a lot closer than the Twitter index would indicate. As well, given that the age distribution in Thunder Bay reflects a older population age distribution, Twitter counts are likely to inflate the influence of the younger demographic. Younger voters and supporters are more likely to be on Twitter and national evidence suggests that support for the Greens and the NDP is stronger in the younger demographic. In addition, the share of Twitter followers of both the incumbents did decline as the election progressed though they still dominated.</div>
<div class="p4">
These features of Twitter followers are also likely an aspect of the distribution of followers among the federal leaders where the overall distribution has changed only a little since I began tracking them on April 5<span class="s3"><sup>th</sup></span>. There seems to have been a small drop in support for the Conservatives and an increase for the Greens and the NDP but there has not been a dramatic shift. Again, Twitter followers are committed enough to follow and so what is being picked up is likely a core vote. The relative ranking of the main parties as currently reflected in the polls does not match the Twitter distribution – there has not been a collapse in Liberal Twitter followers akin to what has happened in the polls. This suggests that the core support for the Liberals may be more solid than the polls indicate and provided they get their core vote out they may do better than expected on May 2<span class="s3"><sup>nd</sup></span>. </div>
<div class="p4">
Neverthless, the Twitter count for the federal leaders points to a Conservative minority and the national polls also point that way with an NDP official opposition. What is interesting is the high turnout at advance polls over the Easter weekend. Generally speaking, large numbers of people rarely turn out to vote for something, they turn out to vote against something. The question is what are the voters voting against? Is it another minority government - which would favour the Conservatives - or are they voting against a Conservative majority? Ultimately, the mind of the electorate is a mystery that will not be revealed until the polls close. Election day will be fascinating, in Thunder Bay as well as across the country.</div>
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<b>Figure 3</b></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBgORESqoWyqqOTUk5646AE8TWRvff5HqZFe6yhvp5jkZ562BKiWoPvWskG0kvTgw48VTdviEnC2RlAkfq9jH2bD05k_d75MROn5Xo_XpWjndyHKTIV1ocAbc8QmsjeFcOF4NFcjw5ZC1z/s1600/a.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgBgORESqoWyqqOTUk5646AE8TWRvff5HqZFe6yhvp5jkZ562BKiWoPvWskG0kvTgw48VTdviEnC2RlAkfq9jH2bD05k_d75MROn5Xo_XpWjndyHKTIV1ocAbc8QmsjeFcOF4NFcjw5ZC1z/s320/a.jpeg" width="320" /></a></div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/has_ontario_s_employment_recover/"><b>Has Ontario's Employment Recovered from the Recession?</b></a></div>
<ul class="ul1">
<li class="li2">Apr 27, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/employment/"><span class="s2">employment</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/recovery/"><span class="s2">recovery</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
<div class="p3">
There has been some debate recently over whether or not Ontario’s employment has recovered from the recession with the provincial <a href="http://www.google.com/hostednews/canadianpress/article/ALeqM5gM02Wg1MSAVXYOWwIyngmEL1PECQ?docId=6565094"><span class="s2">Finance Minister Dwight Duncan stating that 93 percent of jobs lost during the recession have been recovered</span></a>. Has employment recovered? Well, an examination of recent Statistics Canada numbers suggests that the answer depends on how you look at the numbers. Figure 1 plots the 3-month moving average of monthly Ontario employment (not seasonally adjusted) for the period of January 2005 to March 2011 and while it shows that employment has started to recover from the drop that occurred during the recession it has not moved much beyond the peak reached in 2008. If one compares the precession peak of August 2008 (employment of 6,761,200) with the post-recession peak of August 2010 (employment of 6,731,700), then employment post recession is still about 29,500 jobs below where it was going into the recession. However, as the Finance Minister has argued, most of the jobs have been recovered.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFJBEOqdeORVpU7idcNnaR0XRn5yLlmdvKyIyEjzQ8jynznjAtcrmwz1fHdH8R9-BWeSawSpGEpclkMHanl1xg84NklW1DCltY9zcq2l53wo9mnGGG4ENZUFaIdvJAEbYvFtZfXpJUHdFR/s1600/preview_slide1-28.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFJBEOqdeORVpU7idcNnaR0XRn5yLlmdvKyIyEjzQ8jynznjAtcrmwz1fHdH8R9-BWeSawSpGEpclkMHanl1xg84NklW1DCltY9zcq2l53wo9mnGGG4ENZUFaIdvJAEbYvFtZfXpJUHdFR/s320/preview_slide1-28.jpg" width="320" /></a></div>
<div class="p3">
However, if one looks only at the most recent numbers – March of each year going back to 2005 – as depicted in Figure 2, then these numbers suggest that Ontario has actually begun to move beyond its pre-recession employment levels and that the recovery has finally started to gain some solid ground. However, the same figures provided for Thunder Bay (Figures 3 and 4) suggest that while Thunder Bay has bottomed out in terms of employment losses, the recovery has much distance to go. As an added point, Figures 5 and 6 plot the March numbers for Ontario full-time and part-time employment and reveal that while both full-time and part-time employment has grown since the recession, part-time employment grew at a steady pace even during the recession. Full-time employment has only begun to reach where it was before the recession while part-time employment is substantially above where it was in 2008.</div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVcEI4voxboCiaBT6WXYt_2qH1zT4q5_hyphenhyphenGktInx7dDp9HxR2gHpPCPLHBoktoBHVz89mesEjLlzNY6rjg2x9enqVBADeMZ7h7sOrQx8Pn-wLswYz1MlKLaFzNHh6XUbQiUVxm0e19hoyW/s1600/preview_slide1-31.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVcEI4voxboCiaBT6WXYt_2qH1zT4q5_hyphenhyphenGktInx7dDp9HxR2gHpPCPLHBoktoBHVz89mesEjLlzNY6rjg2x9enqVBADeMZ7h7sOrQx8Pn-wLswYz1MlKLaFzNHh6XUbQiUVxm0e19hoyW/s320/preview_slide1-31.jpg" width="320" /></a></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEin0ezk0Yi8KNGyeojpTE3LAIyF82vj7f7fR_CCd_ZLUvUYglKGwg-bfrG1gBE72Jpe_XmlI3KzY7TjlPK0OqolCJQQ3-jNQoY_8JoAJSLWRnOaByaKj8SBOBm9cjOW_d1DEPCwdAuVuUk8/s1600/preview_slide1-30.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEin0ezk0Yi8KNGyeojpTE3LAIyF82vj7f7fR_CCd_ZLUvUYglKGwg-bfrG1gBE72Jpe_XmlI3KzY7TjlPK0OqolCJQQ3-jNQoY_8JoAJSLWRnOaByaKj8SBOBm9cjOW_d1DEPCwdAuVuUk8/s320/preview_slide1-30.jpg" width="320" /></a></div>
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<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/fix_no_1_highway/"><b>Fix No.1 Highway</b></a></div>
<ul class="ul1">
<li class="li6"><span class="s3">Apr 26, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/national+highway/"><span class="s2">national highway</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/"><span class="s2">northwestern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/trans-canada+highway/"><span class="s2">trans-canada highway</span></a></span></li>
</ul>
<div class="p3">
This originally appeared in the <a href="http://opinion.financialpost.com/2011/04/26/fix-no-1-highway/"><span class="s2">Financial Post Comment</span></a>.<b> </b><br />
Special to Financial Post Apr 26, 2011<br />
<br />
By Livio Di Matteo and Wayne Simpson<br />
<br />
The federal election has highlighted the need for transportation infrastructure in Canada’s Far North with the recent federal budget’s announcement of $150-million for an Arctic highway between Inuvik and Tuktoyaktuk. While the goal of a national highway system from sea to sea to sea can be seen as an important nation-building goal, the fact remains that the east-west Trans-Canada Highway system is still inadequate despite its crucial role as a national transportation artery. While much of Highway 1, as it is known in much of Canada, is four lanes, it is still deficient in parts of Eastern and Western Canada. Moreover, even what is four lanes is still a far cry from a world-class highway system, as exists in the U.S. Interstate system or the European autobahns.<br />
<br />
Canada is the largest developed country in the world without a system of fully grade-separated roadways that allow uninterrupted traffic flow between its major urban centres. The key roadblocks include the two-lane stretches from the Manitoba border to Sudbury and much of the route between the Alberta border and Kamloops. Most importantly, the Trans-Canada is still a two-lane stretch through the vital zone of transit through northwestern Ontario connecting the East with the West from the Manitoba border to Sudbury, leaving the nation’s east-west flow of personal and commercial traffic subject to the whims of an errant moose. The slow travel times and disruptions make cutting through the United States an attractive option for east-west travellers, despite the absence of an Interstate route along the border, but U.S. border-crossing formalities have also made this more difficult and time-consuming.<br />
<br />
Canada pays a price for this sub-standard system in the form of higher transportation costs due to longer travel times, increased traffic deaths, reduced tourism opportunities and a diminished sense of national security, given the reduced possibility of rapidly moving assistance from one part of the country to another in times of national distress. The safety aspect alone is important, as it has been estimated that in its first 40 years, the U.S. Interstate Highway System reduced traffic fatalities by 187,000 deaths. Are American lives worth so much more than our own that we cannot invest in the safety of our roadways? Moreover, careful analyses have found that U.S. Interstate highway investments have consistently reduced production and distribution costs and raised productivity across the industrial spectrum, yielding large returns to society.<br />
<br />
In a recent policy paper for the Frontier Center for Public Policy, Wendell Cox makes the case for a Canadian autobahn system that would upgrade the entire transcontinental route from Halifax through Toronto to Vancouver to motorway standard at a cost of about $28-billion. This constitutes a hefty investment that would have to compete for scarce public funds. At present, however, there is no such competition for funds because there appears to be no recognition in Ottawa of the potential value of the national highway project.<br />
<br />
While road transportation is a provincial responsibility, establishing and maintaining a national system of highways definitely has an important nation-building federal role. Yet the national highway system has no prominence on the Infrastructure Canada website and there is no discussion of its potential merits and costs between or during elections. What was the contribution of the soon-to-be-completed Canada Action Plan to improvement of the national highway system? Were strategic components of national highway expansion even considered?<br />
<br />
Despite the substantial price tag, development of a true national highway represents a very small fraction of our current GDP and the economic impacts of the project would be substantial both in the short and long runs. Although some might argue that the time for investment in highways has passed because of environmental concerns, we see little indication that motor vehicle transportation is losing steam as cars and trucks become more fuel efficient and environmentally friendly. As for financing, we already collect substantial gasoline taxes in this country and dedicating a portion of those to upgrading the highway system rather than general revenues makes more sense.<br />
<br />
Livio Di Matteo is professor of economics at Lakehead University. Wayne Simpson is professor of economics at the University of Manitoba.</div>
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<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/resolving_the_u_s__fiscal_crisis/"><b>Resolving the U.S. Fiscal Crisis</b></a></div>
<ul class="ul1">
<li class="li6"><span class="s3">Apr 25, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s2">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+policy/"><span class="s2">fiscal policy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gasoline+tax/"><span class="s2">gasoline tax</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sales+tax/"><span class="s2">sales tax</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s2">united states</span></a></span></li>
</ul>
<div class="p3">
The current debate in the United States over their budget deficit and debt does not appear to be generating solutions that will solve their problem anytime soon. According to the Congressional Budget Office’s analysis of President Obama’s budget proposals, the deficit under the President’s proposals would at first fall, but after 2015 would begin to rise. From a deficit of 1.4 trillion dollars in 2011, the deficit would drop to 841 billion by 2015 and then rise to 1.2 trillion by 2021. The deficit to GDP ratio would fall from 9.5 percent in 2011 to 4.1 percent by 2015 but would then rise to 4.9 percent by 2021. In other words, this is not a viable solution to the United States deficit and debt problem. The United States is the largest and most dynamic economy in the world and has the ability and resources to resolve its deficit problem. However, potential revenue solutions are politically unpalatable. Read about one way they could resolve their deficit in my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/resolving-the-us-fiscal-crisis.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a>.</div>
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<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/federal_election_2011_and_the_no/"><b>Federal Election 2011 and the Northwest</b></a></div>
<ul class="ul1">
<li class="li6"><span class="s3">Apr 21, 2011</span><span class="s1"> </span><span class="s3">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s3">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+election/"><span class="s2">federal election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/forestry/"><span class="s2">forestry</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/highway/"><span class="s2">highway</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/infrastructure/"><span class="s2">infrastructure</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwest+ontario/"><span class="s2">northwest ontario</span></a></span></li>
</ul>
<div class="p3">
With the advance polls on the weekend and the actual election date rapidly approaching, it is time to ruminate on the federal election and the role of the Northwest. Given the recent visits of federal leaders like so many wise men dispensing gifts, it would appear that more than the usual amount of attention is being paid to the Northwest. Over the course of the last week, both Stephen Harper and Jack Layton have visited Thunder Bay while Michael Ignatieff is due on Monday. It would appear from all this attention that the main parties view these seats as fairly contestable despite the fact that they were won by the NDP with fairly large margins last time around.</div>
<div class="p3">
The interest on the part of the Conservatives may seem surprising given that both ridings have returned mainly Liberals or NDP for well over a generation. Yet, the Conservatives managed to make a breakthrough in the Kenora riding during the last election and may see the two Thunder Bay ridings as another potential breakthrough. After all, despite the fact they usually vote Liberal or NDP, these ridings are actually quite “conservative” when it comes to issues like gun control, crime and other social policy. At the same time, both the Liberals and the NDP see these ridings as their traditional electoral territory and are also lavishing their attention. More to the point, with a minority government at present and the potential for another minority quite strong, every seat counts and hence the attention.</div>
<div class="p3">
While it is flattering to get attention, it is also useful to see if the attention amounts to anything substantial in terms of attention to regional issues. One of the things I would like to see addressed by each of the federal parties in the current election is their view on the transportation infrastructure in the region – in particular the fact that the vital “zone of transit” role of this region on the east-west axis is compromised by the poor state of the highway. I would like to see a long-term partnership plan between the federal and provincial governments to upgrade the highway to four-lane status given that the increasing obstacles at the U.S. border make our own east-west link all the more important. Some may argue that in the age of high gas prices and environmental awareness, we should not be investing in more roads but quite frankly I do not see any alternative to road transportation emerging in the near future and new vehicles are becoming more fuel efficient and environmentally friendly all the time. The federal government needs to play a leadership role given the nation-building aspect of a national highway system.</div>
<div class="p3">
In addition, given that Northern Ontario borders on Hudson and James Bay and the Arctic regions of Canada, what role can we in Northwestern Ontario play with respect to Arctic sovereignty? It may sound far-fetched but Thunder Bay is at the east-west cross-roads of the country, is a link between road, water, air and rail transportation and is a logical staging point for a rapid deployment force that can quickly access the Arctic region as well as move east or west in times of a national emergency. Given the low cost of land and housing in the region, it would be easy to build the military infrastructure as well as be a reasonable place to live for the forces stationed in the region. This is a vision that needs a champion and it would be ideal for the federal parties to consider how Thunder Bay’s role as a security linchpin in Canada’s military and rapid response infrastructure could be built. </div>
<div class="p3">
Finally, what more can the Federal government do with respect to promoting Canada’s forest products and in particular Northwestern Ontario’s forest industry to new markets around the world? Trees are a renewable resource and given population growth around the world particularly in the Asia-Pacific area, the demand for wood frame housing is a logical choice. Such an initiative could go a long way in helping our ravaged forest sector recover and once again become an important regional wealth generator.</div>
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<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_twitter_election_u_3/"><b>Thunder Bay Twitter Election Update-IV</b></a></div>
<ul class="ul1">
<li class="li2">Apr 21, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
</ul>
<div class="p3">
Well, with the advance polls coming up on the Easter weekend, this is probably a good time to revisit the Twitter follower statistics I've been monitoring over the course of this federal election. There has been no change in the relative ranking of candidates across the two Thunder Bay ridings as can be seen from the Table below aside from the fact that in Thunder Bay Rainy River the Green candidate has now surpassed the Liberal candidate in terms of the number of Twitter followers. Bruce Hyer still leads in TBSN though Yves Fricot still has the greater growth rate. John Rafferty still leads in TBRR. How this will translate on election day will be interesting in terms of demonstrating just how useful an indicator twitter is for local election forecasting. Unfortunately, not all of the local candidates are on Twitter. At best, this technique might allow for some insight on who might win locally but little on relative distribution of the final vote. Of more interest are the numbers for the federal leaders whose Twitter numbers also better parallel their party standings in the polls. As well, all three party leaders have shown growth in the number of followers but the growth rates have been greatest for Jack Layton and Elizabeth May. Does this signify a surge? We'll have to wait and see.</div>
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<table cellpadding="0" cellspacing="0" class="t1" style="width: 463.0px;">
<tbody>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
30-Mar</div>
</td>
<td class="td3" valign="middle"><div class="p10">
15-Apr</div>
</td>
<td class="td4" valign="middle"><div class="p10">
21-Apr</div>
</td>
<td class="td5" valign="middle"><div class="p9">
%Growth Since April 15</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
TBSN</div>
</td>
<td class="td2" valign="middle"><div class="p9">
Hyer</div>
</td>
<td class="td3" valign="middle"><div class="p10">
385</div>
</td>
<td class="td3" valign="middle"><div class="p10">
424</div>
</td>
<td class="td4" valign="middle"><div class="p10">
431</div>
</td>
<td class="td5" valign="middle"><div class="p10">
1.7</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Fricot</div>
</td>
<td class="td3" valign="middle"><div class="p10">
66</div>
</td>
<td class="td3" valign="middle"><div class="p10">
154</div>
</td>
<td class="td4" valign="middle"><div class="p10">
176</div>
</td>
<td class="td5" valign="middle"><div class="p10">
14.3</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Harvey</div>
</td>
<td class="td3" valign="middle"><div class="p10">
0</div>
</td>
<td class="td3" valign="middle"><div class="p10">
0</div>
</td>
<td class="td4" valign="middle"><div class="p10">
0</div>
</td>
<td class="td5" valign="middle"><div class="p10">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Kyle</div>
</td>
<td class="td3" valign="middle"><div class="p10">
0</div>
</td>
<td class="td3" valign="middle"><div class="p10">
0</div>
</td>
<td class="td4" valign="middle"><div class="p10">
0</div>
</td>
<td class="td5" valign="middle"><div class="p10">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
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</td>
<td class="td4" valign="middle"><div class="p9">
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</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
30-Mar</div>
</td>
<td class="td3" valign="middle"><div class="p10">
15-Apr</div>
</td>
<td class="td4" valign="middle"><div class="p10">
21-Apr</div>
</td>
<td class="td5" valign="middle"><div class="p9">
%Growth Since April 15</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
TBRR</div>
</td>
<td class="td2" valign="middle"><div class="p9">
Rafferty</div>
</td>
<td class="td3" valign="middle"><div class="p10">
1089</div>
</td>
<td class="td3" valign="middle"><div class="p10">
1145</div>
</td>
<td class="td4" valign="middle"><div class="p10">
1166</div>
</td>
<td class="td5" valign="middle"><div class="p10">
1.8</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Boshcoff</div>
</td>
<td class="td3" valign="middle"><div class="p10">
137</div>
</td>
<td class="td3" valign="middle"><div class="p10">
158</div>
</td>
<td class="td4" valign="middle"><div class="p10">
166</div>
</td>
<td class="td5" valign="middle"><div class="p10">
5.1</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Comuzzi-Stehmann</div>
</td>
<td class="td3" valign="middle"><div class="p10">
0</div>
</td>
<td class="td3" valign="middle"><div class="p10">
28</div>
</td>
<td class="td4" valign="middle"><div class="p10">
35</div>
</td>
<td class="td5" valign="middle"><div class="p10">
25.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Shields</div>
</td>
<td class="td3" valign="middle"><div class="p10">
59</div>
</td>
<td class="td3" valign="middle"><div class="p10">
144</div>
</td>
<td class="td4" valign="middle"><div class="p10">
188</div>
</td>
<td class="td5" valign="middle"><div class="p10">
30.6</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" colspan="2" valign="middle"><div class="p9">
National</div>
</td>
<td class="td3" valign="middle"><div class="p10">
05-Apr</div>
</td>
<td class="td3" valign="middle"><div class="p10">
15-Apr</div>
</td>
<td class="td4" valign="middle"><div class="p10">
21-Apr</div>
</td>
<td class="td5" valign="middle"><div class="p9">
%Growth Since April 5</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Stephen Harper</div>
</td>
<td class="td3" valign="middle"><div class="p10">
119471</div>
</td>
<td class="td3" valign="middle"><div class="p10">
126525</div>
</td>
<td class="td4" valign="middle"><div class="p10">
128907</div>
</td>
<td class="td5" valign="middle"><div class="p10">
7.9</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Michael Ignatieff</div>
</td>
<td class="td3" valign="middle"><div class="p10">
82808</div>
</td>
<td class="td3" valign="middle"><div class="p10">
90781</div>
</td>
<td class="td4" valign="middle"><div class="p10">
94040</div>
</td>
<td class="td5" valign="middle"><div class="p10">
13.6</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Jack Layton</div>
</td>
<td class="td3" valign="middle"><div class="p10">
73308</div>
</td>
<td class="td3" valign="middle"><div class="p10">
81122</div>
</td>
<td class="td4" valign="middle"><div class="p10">
84982</div>
</td>
<td class="td5" valign="middle"><div class="p10">
15.9</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Elizabeth May</div>
</td>
<td class="td3" valign="middle"><div class="p10">
17670</div>
</td>
<td class="td3" valign="middle"><div class="p10">
21658</div>
</td>
<td class="td4" valign="middle"><div class="p10">
22390</div>
</td>
<td class="td5" valign="middle"><div class="p10">
26.7</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
Gilles Duceppe</div>
</td>
<td class="td3" valign="middle"><div class="p10">
51402</div>
</td>
<td class="td3" valign="middle"><div class="p10">
54427</div>
</td>
<td class="td4" valign="middle"><div class="p10">
55585</div>
</td>
<td class="td5" valign="middle"><div class="p10">
8.1</div>
</td>
</tr>
</tbody>
</table>
<div class="p8">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t1" style="width: 463.0px;">
<tbody>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p9">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p10">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<br /></div>
</td><td class="td3" valign="middle"><br /></td><td class="td3" valign="middle"><br /></td><td class="td4" valign="middle"><br /></td><td class="td5" valign="middle"><br /></td></tr>
<tr><td class="td1" valign="middle"><br /></td><td class="td2" valign="middle"></td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p10">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p10">
<br /></div>
</td>
</tr>
</tbody>
</table>
<div class="p5">
<br /></div>
<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/canada_s_kobyashi_maru_test/"><b>Canada's Kobyashi Maru Test</b></a></div>
<ul class="ul1">
<li class="li2">Apr 20, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health+care/"><span class="s2">health care</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/kobyashi+maru/"><span class="s2">kobyashi maru</span></a></li>
</ul>
<div class="p3">
I've always enjoyed Star Trek and though a fictional universe, it can often deliver insights into our everyday economic and policy lives. No doubt, one day, there will be a self-help manual published called Everything I Needed to Know, I Learned from Star Trek. However, I digress. In a <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/canadas-kobyashi-maru-test.html#more"><span class="s2">new post on Worthwhile Canadian Initiative</span></a>, I examine the Canadian health policy debate during our current federal election through the tool of Star Trek by relating the infamous Kobyashi Maru test to the health care debate. While we all know how 23rd century James Kirk ultimately beat the test, I'm afraid we are still waiting for an equivalent 21st century Canadian politician. Please visit the post using the above link.</div>
<div class="p5">
<br /></div>
<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_on_radio-cana/"><b>Northern Economist on Radio-Canada!</b></a></div>
<ul class="ul1">
<li class="li2">Apr 18, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/cercle+de+feu/"><span class="s2">cercle de feu</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mining/"><span class="s2">mining</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ring+of+fire/"><span class="s2">ring of fire</span></a></li>
</ul>
<div class="p3">
The Ring of Fire has the potential to be one of the biggest economic drivers in the history of northern Ontario. Radio-Canada will be running a four part series on its nightly Tele-Journal Ontario starting the evening of April 18th at 18:35 dealing with the Ring of Fire/Cercle de Feu. I had the pleasure of being interviewed by the team of Louis Lessard, Thomas Gerbet and Pascal Breniel of Radio Canada as part of the work in preparing the series and some clips from the interview will be aired over the next few nights. You can also catch the story site at <a href="http://www.radio-canada.ca/regions/ontario/dossiers/detail.asp?Pk_Dossiers_regionaux=498"><span class="s2">Radio-Canada</span></a> as well as visit the <a href="http://www.radio-canada.ca/regions/ontario/dossiers/detail.asp?Pk_Dossiers_regionaux=498&Pk_Dossiers_regionaux_page=993&VCh=20110418"><span class="s2">discussion by experts</span></a> on the impact of the Ring of Fire. </div>
<div class="p5">
<br /></div>
<div class="p1">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_twitter_election_u_2/"><b>Thunder Bay Twitter Election Update - III</b></a></div>
<ul class="ul1">
<li class="li2">Apr 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
</ul>
<div class="p3">
Well, we are about halfway through the election campaign and there has not been a lot of change in the relative rankings of the candidates based on the number of Twitter followers. For Thunder Bay Superior North, Bruce Hyer (NDP) remains in the lead with 423 Twitter followers, up 10 percent from the start on March 30<span class="s4"><sup>th</sup></span>. Yves Fricot(LIB) is in second place with 158 followers, up 139 percent from March 30<span class="s4"><sup>th</sup></span> thereby exhibiting the greatest growth. Neither Richard Harvey(C) nor Scott Kyle (GR) yet developed a Twitter presence. Let me know via a comment if they have a Twitter address that I have missed.</div>
<div class="p3">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t2" style="width: 367.0px;">
<tbody>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td4" valign="bottom"><div class="p3">
<b>30-Mar</b></div>
</td>
<td class="td9" valign="bottom"><div class="p3">
<b>08-Apr</b></div>
</td>
<td class="td4" valign="bottom"><div class="p3">
<b>16-Apr</b></div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
TBSN</div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Hyer</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
385</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
400</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
423</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Fricot</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
66</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
127</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
158</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Harvey</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
0</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Kyle</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
0</div>
</td>
</tr>
</tbody>
</table>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
For Thunder Bay Rainy River, John Rafferty (NDP) remains in the lead with 1,146 followers – an increase of 5 percent since March 30<span class="s4"><sup>th</sup></span>. Next is Ken Boshcoff (LIB) with 158 followers – up 15 percent. Moe Comuzzi-Stehmann (C) now has a Twitter presence and as of April 16<span class="s4"><sup>th</sup></span> has 30 followers. Meanwhile, Ed Shields (GR) has 144 followers for an increase of 144 percent since March 30<span class="s4"><sup>th</sup></span>. </div>
<div class="p3">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t2" style="width: 367.0px;">
<tbody>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td4" valign="bottom"><div class="p3">
<b>30-Mar</b></div>
</td>
<td class="td9" valign="bottom"><div class="p3">
<b>08-Apr</b></div>
</td>
<td class="td4" valign="bottom"><div class="p3">
<b>16-Apr</b></div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
TBRR</div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Rafferty</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
1089</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
1113</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
1146</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Boshcoff</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
137</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
147</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
158</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Comuzzi-Stehmann</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
0</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
30</div>
</td>
</tr>
<tr>
<td class="td7" valign="bottom"><div class="p3">
<br /></div>
</td>
<td class="td8" valign="bottom"><div class="p3">
Shields</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
59</div>
</td>
<td class="td9" valign="bottom"><div class="p3">
98</div>
</td>
<td class="td4" valign="bottom"><div class="p3">
144</div>
</td>
</tr>
</tbody>
</table>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
I’ve provided some distributional pie charts to accompany this post. </div>
<div class="p3">
<br /></div>
<div class="p11">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3_tkx5gmqZPiyl9q9bHJRiJwVfOZlbx5zsprz2Gp2k_dLxFU5sGUz-h9LaYswzKmYjZA8hhmCQdcJuRZYWaX5F3uA7tqCAsOKRw_SVhR9PbQnmnwyxCrIZbIgie0sKoIP-1XEmCuW1Sn7/s1600/preview_slide1-26.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi3_tkx5gmqZPiyl9q9bHJRiJwVfOZlbx5zsprz2Gp2k_dLxFU5sGUz-h9LaYswzKmYjZA8hhmCQdcJuRZYWaX5F3uA7tqCAsOKRw_SVhR9PbQnmnwyxCrIZbIgie0sKoIP-1XEmCuW1Sn7/s320/preview_slide1-26.jpg" width="320" /></a></div>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
As well, as an added bonus, I’ve also done the stats and a pie chart for the five federal leaders. Enjoy!</div>
<div class="p3">
<b>Twitter Followers</b></div>
<div class="p8">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t3" style="width: 172.0px;">
<tbody>
<tr>
<td class="td8" valign="middle"><div class="p9">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p10">
<b>16-Apr</b></div>
</td>
</tr>
<tr>
<td class="td8" valign="middle"><div class="p9">
Stephen Harper</div>
</td>
<td class="td4" valign="middle"><div class="p10">
126884</div>
</td>
</tr>
<tr>
<td class="td8" valign="middle"><div class="p9">
Michael Ignatieff</div>
</td>
<td class="td4" valign="middle"><div class="p10">
91177</div>
</td>
</tr>
<tr>
<td class="td8" valign="middle"><div class="p9">
Jack Layton</div>
</td>
<td class="td4" valign="middle"><div class="p10">
81809</div>
</td>
</tr>
<tr>
<td class="td8" valign="middle"><div class="p9">
Elizabeth May</div>
</td>
<td class="td4" valign="middle"><div class="p10">
21737</div>
</td>
</tr>
<tr>
<td class="td8" valign="middle"><div class="p9">
Gilles Duceppe</div>
</td>
<td class="td4" valign="middle"><div class="p10">
54650</div>
</td>
</tr>
</tbody>
</table>
<div class="p3">
<br /></div>
<div class="p1">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHXq1IssJupINciMVNkm7_kY2FC3XLwDSiPuy0Q5F-eZY93398u5H2Aijjt6tUEpY3pgoKBn_dIwerThDtuuExLova4x5D9_y3ra-Ix7xwuPBcaJI_5FCnYm9G3DwnwNRj4YxChQwEheUE/s1600/preview_slide1-27.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHXq1IssJupINciMVNkm7_kY2FC3XLwDSiPuy0Q5F-eZY93398u5H2Aijjt6tUEpY3pgoKBn_dIwerThDtuuExLova4x5D9_y3ra-Ix7xwuPBcaJI_5FCnYm9G3DwnwNRj4YxChQwEheUE/s320/preview_slide1-27.jpg" width="320" /></a></div>
<div class="p1">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/getting_drug_spending_under_cont/"><b>Getting Drug Spending Under Control</b></a></div>
<ul class="ul1">
<li class="li3">Apr 16, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/drugs/"><span class="s2">drugs</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/"><span class="s2">health</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/"><span class="s2">provinces</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/spending/"><span class="s2">spending</span></a></li>
</ul>
<div class="p4">
All provincial governments now have drug expenditure programs for low income individuals and seniors. Drug spending has been one of the fastest growing categories of health expenditure in the public health care system and a concern with respect to sustainability. However, there are interesting differences across the provinces and indeed some provinces have been quite successful in restraining the cost of their drug care plans. Read about it in my latest post on <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/someone-is-getting-health-spending-under-control.html#comments"><span class="s2">Worthwhile Canadian Initiative</span></a>.</div>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/get_out_the_scale_and_weigh_poli/"><b>Get out the scale and weigh politicians</b></a></div>
<ul class="ul1">
<li class="li3">Apr 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/accountability/"><span class="s2">accountability</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/politicians/"><span class="s2">politicians</span></a></li>
</ul>
<div class="p4">
By: <b>Livio Di Matteo</b></div>
<div class="p4">
<b>Originally appeared in the Winnipeg Free Press, April 14</b><span class="s3"><b><sup>th</sup></b></span><b>, 2011, A13.</b></div>
<div class="p4">
<br /></div>
<div class="p4">
Over the last decade, public-sector workers have been inundated with performance and accountability measures designed to ensure taxpayers get value for their dollar.</div>
<div class="p4">
There are many accountability procedures, including annual reports, strategic planning and goal-setting exercises, salary disclosure laws, performance reviews and quality-assurance committees and councils.</div>
<div class="p4">
Yet, the public still seems dissatisfied with their public sector.</div>
<div class="p4">
Moreover, the anecdotal evidence is mounting that these accountability measures churn up substantial time and resources and in the end represent "paper" rather than real accountability.</div>
<div class="p4">
One part of the public sector, however, has emerged relatively unscathed by the accountability mantra -- the politicians themselves.</div>
<div class="p4">
One can speculate the reason politicians are eager to implement public-sector worker accountability measures is to deflect public dissatisfaction away from themselves.</div>
<div class="p4">
The politicians have been keen to subject public-sector employees to larger amounts of paperwork in the name of accountability, yet oddly enough are relatively immune from a process of objective assessment aside from one -- an election.</div>
<div class="p4">
An election is seen as the only accountability process when it comes to the performance of politicians, but this process is really a tournament with the politicians themselves setting the goals of the debate via spin and targeted messaging.</div>
<div class="p4">
It seems increasingly insufficient to assess political performance only once every four years.</div>
<div class="p4">
One of the more amusing methods of assessing a politician's performance outside of an election is in the English town of High Wycombe, where there is an interesting tradition of weighing the mayor and council at the start and end of their term.</div>
<div class="p4">
Mayors and councillors who have gained weight during their term spark much mirth about living high on the hog during their term of office and are booed by the gathered crowd.</div>
<div class="p4">
In days of yore, weighty offenders would also have been pelted with rotten fruits and vegetables.</div>
<div class="p4">
While weighing our parliamentarians might be an amusing way of monitoring both their performance and their health, it would not necessarily provide the best information about their effectiveness in representing their constituents.</div>
<div class="p4">
Why are no comprehensive statistics rating municipal councillors, MPPs and MPs readily available?</div>
<div class="p4">
For example, for members of a city council, it should be easy to compile and publish statistics on how many council meetings they have attended, the number of committees and the number of sub-committees they have sat on, the number of public functions they have represented the city at, or the number of motions they have moved or seconded.</div>
<div class="p4">
Perhaps each year, city councillors could file their own personal annual report in a standardized format listing their activities and accomplishments, as well as setting out a personal strategic plan for what they hope to accomplish over the course of the next year.</div>
<div class="p4">
Subsequent reports would then address how many of those goals were achieved and what remains to be done. Similar approaches could be applied to MPs or MPPs.</div>
<div class="p4">
Just as there are higher education quality-assurance councils for university and college teachers, why not an elected-official monitoring office to provide objective and standardized reports the public could consult during an election campaign?</div>
<div class="p4">
Just as a parliamentary budget officer can provide objective fiscal assessments, a parliamentary accountability office can provide standardized performance indicators on MPs. Where is a Canadian RateMyPoliticians.ca when you need one?</div>
<div class="p4">
Of course, politicians will argue such an approach is difficult to implement objectively and fairly, will become a tool for partisan political purposes, that their work is too complex to subject to quantitative assessment and that they are elected officials subject to the ultimate performance review -- an election.</div>
<div class="p4">
They are elected to govern and, given their ultimate accountability is to the public, they should be immune from what will undoubtedly be an imperfect assessment process. As well, politicians are constantly scrutinized in the media and that can be a very tough process.</div>
<div class="p4">
The politicians may indeed be right, but in excluding themselves from a more objective assessment, they are setting themselves apart from the public they govern.</div>
<div class="p4">
Members of the voting public -- whether employed in the public or private sector -- are constantly being assessed and monitored for their job performance and each passing year seems to bring greater scrutiny and rising mounds of process and paperwork.</div>
<div class="p4">
Why should the politicians be any different?</div>
<div class="p4">
<br /></div>
<div class="p4">
Livio Di Matteo is professor of economics at Lakehead University.</div>
<div class="p5">
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<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/strategic_planning_in_thunder_ba/"><b>Strategic Planning in Thunder Bay</b></a></div>
<ul class="ul1">
<li class="li3">Apr 14, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/strategic+plan/"><span class="s2">strategic plan</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urban/"><span class="s2">urban</span></a></li>
</ul>
<div class="p4">
Spring is in the air and with the renewal of spring comes yet another strategic planning exercise by the City of Thunder Bay designed to guide “the actions of council and administration”. According to the City Manager, “strategic plans are very much about seizing opportunities” with an example being the coming wave of mining development around the Ring of Fire and the need to devise a plan to take advantage of it. Among the objectives that council has laid out as part of the strategic plan are the need to diversify the local economy, increase the quality of life, clean and beautify the city and make it “one of the best run cities in Canada.” At an open public meeting on <a href="http://www.chroniclejournal.com/content/news/local/2011/04/14/now-time-speak"><span class="s2">Wednesday April 13</span></a>, there was apparently much input from the participants but it was noted that the turnout was very low.</div>
<div class="p4">
It should be no surprise that the level of engagement in strategic planning on the part of city residents is rather low. Ultimately, the public consultations may generate some new ideas and valuable input but council and administration have already in a sense provided the objectives and framework within which those comments may occur and the role of the consultation is also a process of legitimization. For example, City Council is moving towards building a new multiplex facility and therefore having it in the strategic plan generates visibility for the idea and the public discussions a forum for enthusiastic supporters to come forward. Of course, if there is substantial opposition to a proposal during any consultation it does not mean a proposal is torpedoed – witness the windmill fiasco and its legal fallout. </div>
<div class="p4">
We have been through a number of these exercises over the years and in the end while they provide a set of general guiding principles and goals for the city, they are for the most part lists of motherhood statements and infrastructure wishes. As for taking advantage of the opportunities in the mining sector to diversify the local economy, well that will happen in spite of whether or not the City of Thunder Bay plans for it. The local private sector will take advantage of economic opportunities generated by the Ring of Fire when there is a profit to be made and not because the City decides to talk about it.</div>
<div class="p4">
Moreover, the course of events often moves at odds with the aspirations of the plan. For example, “quality of life” is a major mantra of city council but explain that to the residents adjacent to the planned windmill development on the Norwesters who feel that their quality of life is about to be severely compromised. As well, the recent stories of pedestrians being randomly pelted with ice or eggs as they enjoy the natural vistas of Thunder Bay does not augur well for quality of life either nor for the goal of becoming a destination city that attracts major events. Thunder Bay is one of the few places I know where on a summer evening as you go out for a walk, you risk being sworn at by drive-by yahoos (often in a pick-up truck) simply for their personal entertainment. </div>
<div class="p4">
This is not to say that strategic planning or thinking is without any value – it is useful in trying to shape the urban space and layout of the city particularly with regards to creating a more vibrant urban setting. Thunder Bay, because of its history as two cities, has evolved into a remarkably dispersed and low-density urban area. In November 1990, in the Chronicle-Journal, there appeared a three part series called “City at a Crossroads” which dealt with the city’s economic future as well as what the opportunities and issues were for the future. One of the suggestions in that set of articles was for a policy of core-specialization with the former downtown area of Fort William designated as government-administrative, the former downtown area of Port Arthur designated as a tourist/entertainment area and the intercity area as mainly commercial/retail. The point was that since history had given us two downtown cores, one may as well work with that legacy in terms of development especially when it comes to things the city government can actually influence. </div>
<div class="p4">
Over the years, subsequent city plans have reflected aspects of this type of thinking and in fits and starts some progress has been made. The Port Arthur core is now the home of Magnus Theatre, the government casino and a major waterfront park development. If a new multiplex/convention center is eventually located near this area’s cluster of restaurants and shops, then a critical mass of activity for an urban experience with a night-life will be created. The Fort William core has a renovated City Hall and adjacent office complexes, a new courthouse complex being built, as well as the new headquarters for the district housing board. This provides a critical mass of government services and activities that will also provide activity for this core.</div>
<div class="p4">
Locating government and public facilities in the former core areas as part of a concerted long-term effort is one way in which municipal government can make a difference to the quality of urban life in Thunder Bay. Providing additional infrastructure and beautification in these designated areas is another especially when it can build on a coherent theme such as tourism and entertainment as in the Port Arthur core or administrative services in the Fort William core. Its always nice when with resources and a little luck in timing, planning exercises are eventually followed through to generate some concrete results. That is the ultimate benefit of a plan - having a long-term public goal in view that allows you to seize opportunities when they emerge - much as the City Manager remarked, but specifically with respect to municipal government investment and service provision. </div>
<div class="p5">
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<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/america_s_dangerous_debt/"><b>America's Dangerous Debt</b></a></div>
<ul class="ul1">
<li class="li3">Apr 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/"><span class="s2">debt</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/"><span class="s2">deficit</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/united+states/"><span class="s2">united states</span></a></li>
</ul>
<div class="p4">
The global financial crisis and recession has taken its toll and nowhere more so than the United States where sluggish employment growth and rising deficits are hampering the recovery of the American economy. Of particular concern is the rise in the levels of U.S. federal public debt which ended off 2010 at about 13.6 trillion dollars. This rising burden of debt has attracted the attention of the IMF and should be of concern to all Canadians. Visit my post at <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/americas-dangerous-debt-.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a> discussing the U.S. debt burden and comparing it to Canada.</div>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/is_thunder_bay_s_housing_market_/"><b>Is Thunder Bay's Housing Market Overheated?</b></a></div>
<ul class="ul1">
<li class="li3">Apr 12, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/housing/"><span class="s2">housing</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/prices/"><span class="s2">prices</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/real+estate/"><span class="s2">real estate</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a></li>
</ul>
<div class="p4">
Concerns have recently been expressed in Thunder Bay City Council that Thunder Bay is experiencing a shortage of affordable housing and that this is affecting our ability to compete and attract business opportunities. Indeed, over the last decade, the number of listings in the Thunder Bay real estate market has dropped and as a result housing prices in Thunder Bay have risen substantially despite the economic impact of the forest sector crisis and the recession. Is housing in Thunder Bay now dangerously over valued?</div>
<div class="p4">
Using data for the period 2000-2009 obtained from the 2010 Canadian Housing Observer, Figure 1 plots average residential prices for Ontario as a whole, Sudbury and Thunder Bay. While average housing prices in Thunder Bay have grown from 109,811 dollars in 2000 to 138,090 dollars in 2009. They remain far below those for Sudbury and indeed Ontario as a whole. Over the same period, average prices in Ontario rose from 183,841 dollars to 318,366 dollars, while prices in Sudbury rose from 109,262 to 200,947 dollars.</div>
<div class="p4">
<b><br /></b></div>
<div class="p4">
<b>Figure 1</b></div>
<div class="p6">
<br /></div>
<div class="p4">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjw8jQ108vChAwJhKdt3I9xeshnFcSoK6mMQ-KKcSAFIJ_jInqNwAGEvy25SK2g2sIhgcwQzqVRoJ_bN2OvxoSRf7WHLSUQgPHKexc-E3CpVQ1qDBnrDpMITWMn0_KSuvTbH3rLVKgfHwMH/s1600/preview_slide1-24.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjw8jQ108vChAwJhKdt3I9xeshnFcSoK6mMQ-KKcSAFIJ_jInqNwAGEvy25SK2g2sIhgcwQzqVRoJ_bN2OvxoSRf7WHLSUQgPHKexc-E3CpVQ1qDBnrDpMITWMn0_KSuvTbH3rLVKgfHwMH/s320/preview_slide1-24.jpg" width="320" /></a></div>
<div class="p4">
One can construct an estimate of a price-earning ratio for housing by taking the ratio of the price of housing to an estimate of the income that could theoretically be earned from it. This is done in Figure 2 by taking the ratio of the average residential price to the average rent for a two-bedroom apartment. In stock markets, price-earnings ratios substantially above 15 are generally taken as evidence that a market is beginning to be overvalued. Despite the price increase, Thunder Bay’s housing price-earning ratio has remained at about 15 over the last decade. On the other hand, the ratio for Sudbury and Ontario has soared. Ontario’s has grown from 18.5 to 27.8 while Sudbury’s has grown from 14.7 to 20.2. Thunder Bay’s has grown from 14.0 to 15.5 suggesting that nothing much has changed. Remarkably, the turmoil in local and regional labour markets seems to have done little to affect the fundamentals of the local housing market. Prices have gone up but so have rents meaning that the price-earning ratio has stayed stable. </div>
<div class="p4">
<br /></div>
<div class="p4">
<b>Figure 2</b></div>
<div class="p4">
<br /></div>
<div class="p6">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnnTuKPcHtyTdnXglTTxzGasE5uK47w_5M4rvmZq5YWfp8L2dq3oSUvcOxN8hWsma3LHpEuzqYAEEL17KA6_kuCkCp3SOPQeynq0kWI38jDLy2SSjMfZRHiE2CnfUs1DZtmYEstfOoNJdi/s1600/preview_slide1-25.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnnTuKPcHtyTdnXglTTxzGasE5uK47w_5M4rvmZq5YWfp8L2dq3oSUvcOxN8hWsma3LHpEuzqYAEEL17KA6_kuCkCp3SOPQeynq0kWI38jDLy2SSjMfZRHiE2CnfUs1DZtmYEstfOoNJdi/s320/preview_slide1-25.jpg" width="320" /></a></div>
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<div class="p5">
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<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_twitter_election_u_1/"><b>Thunder Bay Twitter Election Update - II</b></a></div>
<ul class="ul1">
<li class="li3">Apr 8, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
</ul>
<div class="p4">
Well, a week has gone by since my last update on the number of Twitter followers for the candidates in the two Thunder Bay area riding. There has even been some local media coverage of my Thunder Bay Twitter Election numbers on <a href="http://magic999news.blogspot.com/2011/04/lu-prof-follows-candidate-tweets.html"><span class="s2">Magic 99.9</span></a>. The two incumbents still lead strongly in the overall number of Twitter followers but the growth has been mainly in the following of their opponents. In Thunder Bay-Superior North, Yves Fricot has seen the number of followers grow 92 percent since March 30th. In Thunder Bay-Rainy River, Ed Shields has seen his followers grow about 66 percent. To the best of my knowledge, neither Conservative candidate has set up their own Twitter account and neither has the Green candidate in TBSN. Will update again in about a week to see if there are any shifts.</div>
<div class="p4">
<br /></div>
<div class="p7">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t1" style="width: 399.0px;">
<tbody>
<tr>
<td class="td1" valign="middle"><div class="p8">
Twitter Followers</div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
<b>TBSN</b></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<b>30-Mar</b></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<b>02-Apr</b></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<b>05-Apr</b></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<b>08-Apr</b></div>
</td>
<td class="td5" valign="middle"><div class="p8">
<b> % Growth</b></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Hyer</div>
</td>
<td class="td2" valign="middle"><div class="p9">
385</div>
</td>
<td class="td3" valign="middle"><div class="p9">
396</div>
</td>
<td class="td4" valign="middle"><div class="p9">
397</div>
</td>
<td class="td2" valign="middle"><div class="p9">
400</div>
</td>
<td class="td5" valign="middle"><div class="p9">
3.9</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Fricot</div>
</td>
<td class="td2" valign="middle"><div class="p9">
66</div>
</td>
<td class="td3" valign="middle"><div class="p9">
101</div>
</td>
<td class="td4" valign="middle"><div class="p9">
114</div>
</td>
<td class="td2" valign="middle"><div class="p9">
127</div>
</td>
<td class="td5" valign="middle"><div class="p9">
92.4</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Harvey</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td3" valign="middle"><div class="p9">
0</div>
</td>
<td class="td4" valign="middle"><div class="p9">
0</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td5" valign="middle"><div class="p9">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Kyle</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td3" valign="middle"><div class="p9">
0</div>
</td>
<td class="td4" valign="middle"><div class="p9">
0</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td5" valign="middle"><div class="p9">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td3" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td4" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td2" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td5" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
<b>TBRR</b></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<b>30-Mar</b></div>
</td>
<td class="td3" valign="middle"><div class="p9">
<b>02-Apr</b></div>
</td>
<td class="td4" valign="middle"><div class="p9">
<b>05-Apr</b></div>
</td>
<td class="td2" valign="middle"><div class="p9">
<b>08-Apr</b></div>
</td>
<td class="td5" valign="middle"><div class="p8">
<b> % Growth</b></div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Rafferty</div>
</td>
<td class="td2" valign="middle"><div class="p9">
1089</div>
</td>
<td class="td3" valign="middle"><div class="p9">
1099</div>
</td>
<td class="td4" valign="middle"><div class="p9">
1106</div>
</td>
<td class="td2" valign="middle"><div class="p9">
1113</div>
</td>
<td class="td5" valign="middle"><div class="p9">
2.2</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Boshcoff</div>
</td>
<td class="td2" valign="middle"><div class="p9">
137</div>
</td>
<td class="td3" valign="middle"><div class="p9">
138</div>
</td>
<td class="td4" valign="middle"><div class="p9">
144</div>
</td>
<td class="td2" valign="middle"><div class="p9">
147</div>
</td>
<td class="td5" valign="middle"><div class="p9">
7.3</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Comuzzi-Stehmann</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td3" valign="middle"><div class="p9">
0</div>
</td>
<td class="td4" valign="middle"><div class="p9">
0</div>
</td>
<td class="td2" valign="middle"><div class="p9">
0</div>
</td>
<td class="td5" valign="middle"><div class="p9">
0.0</div>
</td>
</tr>
<tr>
<td class="td1" valign="middle"><div class="p8">
Shields</div>
</td>
<td class="td2" valign="middle"><div class="p9">
59</div>
</td>
<td class="td3" valign="middle"><div class="p9">
69</div>
</td>
<td class="td4" valign="middle"><div class="p9">
87</div>
</td>
<td class="td2" valign="middle"><div class="p9">
98</div>
</td>
<td class="td5" valign="middle"><div class="p9">
66.1</div>
</td>
</tr>
</tbody>
</table>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/does_the_north_need_a_provincial/"><b>Does the North Need a Provincial Minority Government?</b></a></div>
<ul class="ul1">
<li class="li10"><span class="s4">Apr 5, 2011</span><span class="s1"> </span><span class="s4">Posted By: Livio Di Matteo</span><span class="s1"> </span><span class="s4">Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/minority+government/"><span class="s2">minority government</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/"><span class="s2">northern ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/"><span class="s2">ontario</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provincial+election/"><span class="s2">provincial election</span></a></span></li>
</ul>
<div class="p4">
In light of a federal election that may yet provide us with another minority government, it is useful to contemplate whether a minority government at Queen’s Park might not be a useful development for Northern Ontario. While majorities provide stable government, they also provide an environment where it can sometimes be difficult to get your point of view across especially if your region is marginal in terms of its share of population and electoral seats. </div>
<div class="p4">
Consider the last decade in Northwestern Ontario under a provincial Liberal majority government. Despite persistent lobbying by Northerners for something to be done about the forest sector crisis, the provincial government (even with cabinet representation from the North) took a long time to recognize the problem and by the time it offered some relief, much of the sector had shut down. Then there was the Far North Act, which sequestered large sections of the North from economic development with very little debate. Then there has been the reluctance of the provincial government to do anything about regional energy prices or bring about tax incentive zones. One not need even begin getting into the province's controversial green energy policies. Most recently, has been the decision of the provincial government to not hold hearings in the North for Bill 151, which will deal with forest tenure reform and instead hold them only in Toronto.</div>
<div class="p4">
A majority government is in many respects an elected dictatorship and once Rome has spoken, the case is closed. A minority government, because of its inherent fragility, is much more open to debate and compromise. The parties need to work together and that forces a degree of consultation and accommodation that takes multiple points of view into account. There have been minorities in Ontario in the past including a period of Conservative ones from 1975 to 1981 and of course the minority of the 1985-87 period. From 1985 to 1987, there was a minority government under a Liberal-NDP accord with David Peterson that ultimately generated a large number of positive programs for Northern Ontario. </div>
<div class="p4">
Indeed, the period 1985-1987 saw a program of broad accomplishment in the North that really has not been equaled since and it was mainly due to the minority government situation, which made even small marginal regions more electorally important. And what was the result for Northern Ontario? The Northern Ontario Heritage Fund was formally established in the summer of 1988. The Northern Ontario Health Travel Grants was established in 1985. And, in July of 1986, a program for moving government jobs was announced and over the next year 1200 jobs moved north including the registrar general to Thunder Bay, Ontario Lottery Corporation to the Sault and Correctional Services to North Bay. You can debate how successful any of these programs ultimately were but they were attempts at solutions.</div>
<div class="p4">
Minority governments are not perfect but they do create an environment where there is more debate and trade when it comes to important issues. A minority government in October’s provincial election is something that could happen but it might not be a bad development for Northern Ontario.</div>
<div class="p4">
<br /></div>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/ranking_prime_ministers/"><b>Ranking Prime Ministers</b></a></div>
<ul class="ul1">
<li class="li3">Apr 5, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/"><span class="s2">canada</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/"><span class="s2">economy</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth/"><span class="s2">growth</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/prime+ministers/"><span class="s2">prime ministers</span></a></li>
</ul>
<div class="p4">
Well it is another federal election and so I thought it would be interesting to revisit that old adage "Tory times Are Tough Times" by looking at some data on real per capita income growth and prime ministerial terms to see if the terms of Conservative prime ministers generally had lower per capita income growth than Liberal prime ministers. See the post at <a href="http://worthwhile.typepad.com/worthwhile_canadian_initi/2011/04/there-is-an-old-adage-in-canadian-political-lore-that-tory-times-are-tough-times-and-that-liberal-governments-have-gene.html#more"><span class="s2">Worthwhile Canadian Initiative</span></a>.</div>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_around_the_wo/"><b>Northern Economist Around the World</b></a></div>
<ul class="ul1">
<li class="li3">Apr 2, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+economist/"><span class="s2">northern economist</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/visits/"><span class="s2">visits</span></a></li>
</ul>
<div class="p4">
I've been blogging on Northern Economist for about four months now and what is interesting when you check the statistics is the geographic range of the countries the hits originate from. Most of my visitors are from Canada and in particular Ontario but there are a large number of western Canadian hits. As well, there are visitors from other parts of the world. Over the months, there have been visitors from Russia, Denmark, the UK, Germany and New Zealand. I've included a screen shot which shows visits over the last few weeks and they show first time visitors from The Philippines, Mexico and Nigeria. Thank you to all visitors to this blog site.</div>
<div class="p4">
<br /></div>
<div class="p6">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjU_1rFsXNPtMBDZxLZCW4SeChQ_Ca_wIr-rOzUuuUMwU3azF5BwOoYGQ_WZ0piJjp15Z9h9l6lOgPqvyfGbPTYfaTHMocWL6KS7XhsGbE_up36kxzc9gGHvKn7RFZ8bEELcUw2E-D413Qx/s1600/preview_screen_shot_2011-04-02_at_10.11.06_am.jpg" imageanchor="1"><img border="0" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjU_1rFsXNPtMBDZxLZCW4SeChQ_Ca_wIr-rOzUuuUMwU3azF5BwOoYGQ_WZ0piJjp15Z9h9l6lOgPqvyfGbPTYfaTHMocWL6KS7XhsGbE_up36kxzc9gGHvKn7RFZ8bEELcUw2E-D413Qx/s320/preview_screen_shot_2011-04-02_at_10.11.06_am.jpg" width="320" /></a></div>
<div class="p4">
<br /></div>
<div class="p4">
<br /></div>
<div class="p11">
<br /></div>
<div class="p4">
<br /></div>
<div class="p5">
<br /></div>
<div class="p2">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_twitter_election_upd/"><b>Thunder Bay Twitter Election Update</b></a></div>
<ul class="ul1">
<li class="li3">Apr 2, 2011<span class="s1"> </span>Posted By: Livio Di Matteo<span class="s1"> </span>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/"><span class="s2">election</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/"><span class="s2">thunder bay</span></a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/"><span class="s2">twitter</span></a></li>
</ul>
<div class="p4">
Well, after my March 30th post, I decided to do a quick update (April 2 at about 9:30am) to see if there was any major change in the number of Twitter followers for the two Thunder Bay ridings after a couple of days. The results are interesting as the Table below shows. All of the candidates who had Twitter accounts have seen an increase though the largest percentage increases since go to Yves Fricot - who saw a 53 percent increase - and Ed Shields - who saw almost a 17 percent increase. Of course, their totals are still well below the incumbents. As well, there still appears to be no movement on the Twitter front for the two Conservative candidates as well as the Green candidate in Thunder Bay Superior North. Will check again in a few days and provide another update.</div>
<div class="p4">
<br /></div>
<div class="p4">
<br /></div>
<div class="p7">
<br /></div>
<table cellpadding="0" cellspacing="0" class="t2" style="width: 421.0px;">
<tbody>
<tr>
<td class="td6" valign="middle"><div class="p8">
<b>Twitter Followers</b></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p9">
<b>30-Mar</b></div>
</td>
<td class="td7" valign="middle"><div class="p9">
<b>02-Apr</b></div>
</td>
<td class="td8" valign="middle"><div class="p8">
<b> Percent Change</b></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Hyer</div>
</td>
<td class="td7" valign="middle"><div class="p9">
385</div>
</td>
<td class="td7" valign="middle"><div class="p9">
396</div>
</td>
<td class="td8" valign="middle"><div class="p9">
2.9</div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Fricot</div>
</td>
<td class="td7" valign="middle"><div class="p9">
66</div>
</td>
<td class="td7" valign="middle"><div class="p9">
101</div>
</td>
<td class="td8" valign="middle"><div class="p9">
53.0</div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Harvey</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Kyle</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td7" valign="middle"><div class="p8">
<br /></div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Rafferty</div>
</td>
<td class="td7" valign="middle"><div class="p9">
1089</div>
</td>
<td class="td7" valign="middle"><div class="p9">
1099</div>
</td>
<td class="td8" valign="middle"><div class="p9">
0.9</div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Boshcoff</div>
</td>
<td class="td7" valign="middle"><div class="p9">
137</div>
</td>
<td class="td7" valign="middle"><div class="p9">
138</div>
</td>
<td class="td8" valign="middle"><div class="p9">
0.7</div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Comuzzi-Stehmann</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td7" valign="middle"><div class="p9">
0</div>
</td>
<td class="td8" valign="middle"><div class="p8">
<br /></div>
</td>
</tr>
<tr>
<td class="td6" valign="middle"><div class="p8">
Shields</div>
</td>
<td class="td7" valign="middle"><div class="p9">
59</div>
</td>
<td class="td7" valign="middle"><div class="p9">
69</div>
</td>
<td class="td8" valign="middle"><div class="p9">
16.9</div>
</td>
</tr>
</tbody>
</table>
<div class="p11">
</div>
<div class="p5">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p3">
<br /></div>
<div class="p5">
</div>
<div class="p5">
<br /></div>
Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-8200747782050505232016-12-14T06:40:00.002-08:002017-05-28T05:48:33.728-07:00March 2011 Posts<h1>
17 Posts from March 2011 </h1>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/twitter__the_federal_election___/">Twitter, The Federal Election & Thunder Bay</a></h2>
<ul class="post_info">
<li class="post_date">Mar 30, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/election/">election</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/twitter/">twitter</a></li>
</ul>
<div class="post_body">
It is said that the current federal election is the first real
social media election and will be fought on the sites of Facebook and
Twitter as well as door-by-door campaigning. All the candidates
listed below have taken advantage of the internet in that they have a
web page presence with some information on their parties and
platforms. Another way to interact and campaign is via Twitter,
which with its 140 character messages seems ideally suited to the
attention span of modern politics. One way to assess the social
media profile of candidates to date in the federal campaign in our two
Thunder Bay Ridings is to look at their number of Twitter
followers. As of approximately 11pm on Wednesday, March 30, 2011,
the numbers looked something like this:<br />
<br />
Thunder Bay-Superior North<br />
<br />
Bruce Hyer
(NDP)
385<br />
Yves Fricot
(LIB)
66<br />
Richard Harvey (CON)
could not locate on Twitter.<br />
Scott Kyle (GRN)
could not locate on Twitter.<br />
<br />
Thunder Bay-Rainy River<br />
<br />
John Rafferty
(NDP)
1089<br />
Ken Boshcoff
(LIB)
137 <br />
Maureen Comuzzi-Stehmann (CON) could not locate on Twitter.<br />
Ed Shields
(GRN)
59<br />
<br />
It is still early in the campaign but the incumbents in the two
ridings currently appear to have the largest number of Twitter
followers. A number of candidates could not be located on Twitter
yet – either I was unable to find them or they have not set themselves
up. If they are set up on Twitter and I have missed them, please
let me know. I will check again in coming weeks to see whether
they have Twitter sites. It will be interesting to see how the
number of Twitter followers is correlated with the ultimate vote tallies
if at all.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/ontario_budget_delays_the_pain/">Ontario budget delays the pain</a></h2>
<ul class="post_info">
<li class="post_date">Mar 30, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/budget/">budget</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/">debt</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/">deficit</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/">ontario</a></li>
</ul>
<div class="post_body">
This article originally appeared in the March 30th edition of the <a href="http://www.ottawacitizen.com/opinion/Ontario+budget+delays+pain/4525636/story.html">Ottawa Citizen.</a><br />
Ontario faces tough fiscal decisions, but Tuesday's provincial budget
defers the day of reckoning. The political calculus of a looming fall
election combined with the increased revenues from a slowly recovering
economy will be used to make a token assault on the deficit. Any
concerted attack on the deficit will likely not take effect until well
after the election. More importantly, there was no credible long-term
plan to address the province's net debt, which is expected to reach
$285-billion by 2013-14.<br />
Since 2000, the annual growth rate for provincial government
expenditure in Ontario has averaged about 10 per cent, while revenue has
grown at about six per cent annually. For the period 2010 to 2013,
revenue is projected to grow about four per cent annually, while
expenditure growth will slow to about two per cent. True, the recession
and world financial crisis caused expenditures since 2007 to rapidly
outpace revenues, and running deficits to stimulate the economy during a
recession is a reasonable policy. However, while the economy will begin
to improve and revenues rise, Tuesday's budget shows substantial
deficits well into the future, feeding an ever-mounting provincial debt.<br />
From a net debt of $157 billion in 2007, Ontario's net public debt
rose to an estimated $242 billion in 2010, and it can be expected to
surpass $300 billion in the very near future.<br />
To be frank, there is plenty of blame to share regarding the state of
Ontario's finances given that the debt has risen steadily from the
mid-1960s, when it stood at a paltry $1.6 billion. Over the decades,
deficits were incurred in bad economic times, but during the recovery
balanced budgets rather than surpluses were the norm.<br />
Additional revenues were used to boost spending rather than pay down
debt. Governments have consistently lacked the long-term discipline
needed to bring the public finances under control and the result is a
higher debt with a deeper hold.<br />
The reluctance to seriously address the debt in Ontario is rooted in
the province's well-meaning political culture of investment and support
for its citizens. It is important to provide public programs and
services, and who wants to be seen as tight-fisted when revenues are
rising? All governments have been proud of their investments in health
and education and none more so than the current provincial government.<br />
However, program pride generally goes before the fiscal fall.
Increased spending on important programs such as health and education is
motivated by the best of intentions, but the road to debt, like the
road to hell, is strewn with good intentions.<br />
Given that Ontario's net debt was about $130 billion in 2001, it
means that about half of Ontario's net debt was acquired in just 10
years. Indeed, more than 80 per cent of Ontario's net public debt since
Confederation was acquired in the 20 years since 1990.<br />
A big driver in the historical growth of the debt has been the power
of compound interest. Recent debt service costs in Ontario have only
been as manageable as they are because of historically low interest
rates with an effective interest rate on the debt of about four per
cent. Yet, inflationary pressures in world commodity markets will
eventually spark interest rate increases. An increase of one percentage
point in debt servicing costs will easily add $2.5 billion to
expenditures, making a balanced budget an ever more elusive target.
Indeed, Tuesday's budget forecasts debt service will rise from $9.5
billion in 2010 to $12.6 billion in 2013 and to $16.3 billion by 2017.<br />
A disciplined approach of restraining expenditure growth below the
rate of revenue growth to generate regular and recurrent surpluses,
which, after the budget is balanced, are applied to reducing the debt
and its service costs is a preferable long-term option.<br />
Deep spending cuts and austerity are painful.<br />
However, given the manner in which government in Ontario has deferred
dealing with the debt, the use of spending cuts becomes inevitable.
Governments in Ontario live for the moment, spending revenue as quickly
as it comes in and then, when faced by a brick debt wall, they embark on
fiscal austerity as a quick fix causing immense pain through service
and program cuts. It is undisciplined and irresponsible. Where is the
pride in that?<br />
Livio Di Matteo is professor of economics at Lakehead University and a
contributor to Worthwhile Canadian Initiative, Canada's premier
economics blog.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/the_provincial_budget_and_the_no/">The Provincial Budget and the Northwest: What Can We Expect?</a></h2>
<ul class="post_info">
<li class="post_date">Mar 26, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/budget/">budget</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/">deficit</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/">northwestern ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/">ontario</a></li>
</ul>
<div class="post_body">
Well, another week and yet another budget – this time it will be
Ontario. Ontario has had a very difficult fiscal time of
late. With expenditures of over 126 billion dollars and revenues
just under 108 billion, the deficit stands at about 19 billion dollars
and the debt at almost 245 billion. This is not a recent
problem given the long-term trend in Ontario’s public finances that I
have documented in a recent post on Worthwhile Canadian Initiative.
Given the fiscal sustainability issues that it faces one might expect
that the provincial government will embark on a major austerity program
but that is probably not going to be case given that we are going into a
fall election. The provincial government will provide some very
stern rhetoric concerning the need for fiscal responsibility and
austerity but will likely use the increased revenues from a recovering
economy to make only a token assault on the deficit. A concerted
assault on the deficit may be announced but it will likely not take
effect until well after the election.<br />
Delaying addressing the long-term sustainability of the province’s
finances is not in the best interests of the tax-paying public. On
the other hand, for the Northwest and Northern Ontario in general, this
is likely to be relatively good news given the large role that
government infrastructure spending and investment has played in
stabilizing the regional economy in the wake of the forest sector crisis
and the recession. For example, the Northwest has seen millions
of dollars in provincial road construction and improvements announced or
implemented as part of a planned $273 million investment in regional
highways. For other evidence on provincial government spending in
the Northwest, one only has to pick up the local paper and see the
continual pre-election announcements by our local MPPs reminding us of
how much has been spent on health, education and other programs.<br />
What would be the things I would like to see in Tuesday’s budget
specifically for the Northwest? Well, to start, the budget would
be a good time to announce some specifics on the recently released
Northern Growth Plan. Going beyond the rhetoric of the plan, what
spending specifics is the government going to commit to? Given the
commitment for an integrated transportation system does it mean more
dollars for upgrading the provincial highway system to access the Ring
of Fire? Will there be any specific tax changes for the North to
“maximize” the potential of our resource development? Will there be new
programs on aboriginal education and infrastructure?<br />
Barring the growth plan, can we expect any movement at all on
electricity prices for the region given the importance they have for the
resource sector as well as planned future mining developments in the
Ring of Fire. The province has also been committed to increasing
the number of post-secondary education graduates in Ontario – how much
extra funding will that translate into for Confederation College and
Lakehead University?<br />
On a more whimsical note, the province recently announced the closing
of old jails and the construction of new money-saving cost-effective
prisons in Toronto and Windsor. Given the high land prices in
southern Ontario, what could be more cost-effective than building the
new prisons in Nipigon, Atikokan or Terrace Bay? Given the
Toronto-centric lifestyle of the average southern Ontarian, imagine the
deterrence effect on criminal activity when word spreads criminals would
be serving their prison sentence up North! Moreover, on windless
days, these same prisoners could be used to manually turn the crank on
all those windmills being built and help generate environmentally
friendly energy and also keep fit.<br />
Given the fiscal box the province is currently in, this budget may
likely not offer substantial pre-election goodies. On the other
hand, neither will there be any major expenditure cuts or program
reductions. For the Northwest, this budget might be the fiscal
equivalent of the Northern Growth Plan. This means we can look
forward to our local MPPs announcing the same expenditures and
initiatives over and over again in the six months leading up to the
October election.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/gdp___population_shares__natural/">GDP & Population Shares, Natural Resources & Prosperity: A National Comparison</a></h2>
<ul class="post_info">
<li class="post_date">Mar 24, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/">gdp</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/natural+resources/">natural resources</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/">population</a></li>
</ul>
<div class="post_body">
Over the last thirty years, there have been substantial changes
in the Canadian economy and one of the changes is the evolving share of
output accounted for by each of the provinces. In my latest post
on Worthwhile Canadian Initiative,
I compare population and GDP shares for each of the ten provinces since
1981. The importance of natural resources is highlighted in this
post given the performance surge of Newfoundland and Labrador as well as
Saskatchewan. It would appear that "rocks and trees" are still
important.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/federal_budget___the_northwest/">Federal Budget & The Northwest</a></h2>
<ul class="post_info">
<li class="post_date">Mar 22, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+budget/">federal budget</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/">northwestern ontario</a></li>
</ul>
<div class="post_body">
The release of the Federal budget this afternoon represents a
relatively cautious approach to dealing with the economy as well as the
prospect of a federal election. There are large numbers of credits
and programs that will appeal to many people as well as those of us
here in the Northwest. For example, there are incentives for rural
doctors and nurses, a family caregiver tax credit (cleverly borrowed
from the Liberals), an extension of the energy retrofit program,
enhanced GIS payments for seniors and even an arts tax credit for
children. This provides a generous base of policy options on which
to build an election campaign should an election campaign occur.
Specifically mentioned in the budget is the 4 million dollars for a
cyclotron to produce medical isotopes at the Thunder Bay Regional
Research Institute. This would certainly be a handsome addition to
the knowledge economy infrastructure of Thunder Bay. The budget
is also planning some revenue enhancements including closing up a tax
deferral loophole for corporations that will bring in about a billion
dollars a year and increases in EI premiums of 5 cents per 100 dollars
in 2011 and 10 cents in 2012. The EI premium announcement is a tax
increase and it will be interesting to see how the opposition reacts to
it. The deficit is slated to come in at 40 billion dollars for
2010-11 but it may likely be even smaller once the full tally for the
fiscal year is done. One interesting item of interest to
Northwesterners was the announcement of 150 million dollars to build an
all-weather road in the Northwest Territories. I suppose it would
have been nice to have had a similar announcement on roads in
Northwestern Ontario given the need for all-weather roads here as well
as the fact that the Trans-Canada in this region is not up to par with
the rest of the country. Also missing from the budget was any
serious in-depth discussion of how to deal with the long-term
sustainability of federal finances given rising health care costs and an
aging population. On the other hand, all the Federal parties are
currently living for the moment and are not going to focus on the far
future.<br />
Will all this be enough to avoid an election? Independently of the
contempt of Parliament issue, it might of been but listening to Jack
Layton this afternoon it appears that we may indeed be headed for an
election unless there are some last minute amendments to the budget to
satisfy the NDP. Who wins from this budget? If there is an
election, the Conservatives have a pretty good platform from which to
campaign. The NDP and the Liberals will have difficulty
campaigning on the economy and the budget. If there is no
election, the Conservatives hang on to power for a bit longer and the
NDP demonstrate that they can bring some gains to Canadians via their
brokering role. The longer the minority government lasts, the
weaker the Liberal hand gets given the difficulties Michael Ignatieff
has been having in his leadership role. It is going to be an
interesting week.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay%E2%80%99s_changing_age_str/">Thunder Bay’s Changing Age Structure & Population</a></h2>
<ul class="post_info">
<li class="post_date">Mar 18, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/age+structure/">age structure</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fertility/">fertility</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/population/">population</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a></li>
</ul>
<div class="post_body">
Thunder Bay’s population has been a source of some angst over the
years given that it has remained flat for several decades now while
other parts of the province and the country have continued to see
substantial increases. It has not always been that way as a glance
at Figure 1 shows. Thunder Bay has experienced periods of
extremely rapid population increase in the past. From a population
of only 503 people in 1871, Thunder Bay (then the twin cities of Port
Arthur and Fort William) grew to 6,847 people by 1901 and then had a
population explosion induced by the wheat boom that saw its numbers grow
to 27,719 in 1911 and then reach 35,427 by 1921 (Census of Canada is
the data source). Population growth continued but its pace picked
up during the post-war economic boom and population grew from 55,011 in
1941 to 108,411 in 1971 at the tail end of the post-war boom.
Population growth then slowed dramatically and rose only gradually to
peak at 113,946 in 1991 and then declined afterwards reaching 109,140 in
the 2006 census.<br />
<br />
<b>Figure 1</b><br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjpujzfpkLHwz9shPeJjBCNomMhvnaCMhzfLJjnXnK-lPmkqNOWeJgzHL2xGHGftx42NBgdy-3dIe53Gk3uYPQ1JVk5Jz1iAQYvCfR_o8Lt-eEI4cec11XIq9qwhCh9-gEMtuvuvoeuH92/s1600/-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhjpujzfpkLHwz9shPeJjBCNomMhvnaCMhzfLJjnXnK-lPmkqNOWeJgzHL2xGHGftx42NBgdy-3dIe53Gk3uYPQ1JVk5Jz1iAQYvCfR_o8Lt-eEI4cec11XIq9qwhCh9-gEMtuvuvoeuH92/s320/-1.jpg" width="320" /></a><br />
<div style="text-align: center;">
</div>
<br />
However, another less discussed feature of Thunder Bay’s population
is its age distribution. That has also seen some remarkable
changes over time as Figure 2 shows. The periods of economic boom
have been accompanied by increased in-migration as well as high birth
rates that generated a very youthful population. Periods of slow
economic growth and stagnation, on the other hand have resulted in
outmigration and an aging population structure. In 1921, at the
end of the wheat boom era, Thunder Bay had 52 percent of its population
aged 24 years or less. This was partly a function of the boom but
also a reflection of the higher fertility rates and larger families of
the time period. By 1941, at the end of the Great Depression, only
33 percent of the city’s population was under age 24. Similarly
if one goes to the post-war boom period, by 1971, an amazing 45 percent
of Thunder Bay’s population was aged 24 years or less. By 2006,
after twenty years of slow economic growth and outmigration, only about
30 percent of the population was below age 24.<br />
<br />
<b>Figure 2</b><br />
<div style="text-align: center;">
</div>
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2HCCHk3XtnEyxXcydqzS3q19VySWp76F1V3rvFTi7HeE4xUMVz2k8m6K93xKPBduTQFuS7snYC_s_bJot30EcefZBwMNPc4yK-l-VHjGf1ow4MFlXTi2rFNMDiMpdRBLCBpjjDGrgzPDR/s1600/-2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2HCCHk3XtnEyxXcydqzS3q19VySWp76F1V3rvFTi7HeE4xUMVz2k8m6K93xKPBduTQFuS7snYC_s_bJot30EcefZBwMNPc4yK-l-VHjGf1ow4MFlXTi2rFNMDiMpdRBLCBpjjDGrgzPDR/s320/-2.jpg" width="320" /></a><br />
Population growth and age distribution reflects economic opportunity
and the period since 1971 has generally been one of diminished
opportunity, unlike the wheat boom era of 1891 to 1921 and the post 1945
natural resource and baby booms. A smaller population provides a
less dynamic environment for entrepreneurship, economic activity and
change but a less youthful one reinforces the tendency even more.
In some respects, Thunder Bay has done remarkably well given that since
1990 total employment has remained relatively stable despite the
slowdown. However, given the influx of youth and increased female labour
force participation into the labour market from the post-war youth
bulge, it has meant that not everyone was able to find a home in the
local labour market. Many chose to go elsewhere. One can
only imagine what Thunder Bay might look like today if employment
opportunities had been available for all the young and they had remained
and started families. This should reinforce our drive to ensure a
successful knowledge economy transition and opportunities for the youth
of today. While not everyone necessarily wants to stay, it is
nice to afford them the choice.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/sustainable_federal_spending_ess/">Sustainable federal spending essential</a></h2>
<ul class="post_info">
<li class="post_date">Mar 18, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/">deficit</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+budget/">federal budget</a></li>
</ul>
<div class="post_body">
This originally appeared in the Winnipeg Free Press, March 17<sup>th</sup>, 2011<br />
<div style="margin: 0.1pt 0cm;">
by Livio Di Matteo</div>
<div style="margin: 0.1pt 0cm;">
<br /></div>
<div style="margin: 0.1pt 0cm;">
The political intrigue in Ottawa is
rapidly moving us towards an election, which means that the budget could
simply be a dramatic reading rather than a policy exercise. As a
result, the necessary steps to deal with the current federal fiscal
situation will be delayed many months.</div>
<div style="margin: 0.1pt 0cm;">
In typical Canadian fashion, when faced
with an important economic challenge, we often choose to delay the
decision as long as possible and replace it either with a royal
commission, a discussion of democratic process and engagement, or a
statement of what constitutes Canadian values. Barring those diversions,
there is always the prospect of some other scandal emerging to divert
our attention.</div>
<div style="margin: 0.1pt 0cm;">
The key question is whether federal
spending is sustainable; that is, does the increase in the resource base
match the increase in spending? An examination of data from the Federal
Fiscal Reference Tables for the period 1961 to 2009 suggest that
federal spending has been largely unsustainable for much of the last 50
years, except when there is a focused effort to rein it in as during the
fiscal restraint of the 1990s.</div>
<div style="margin: 0.1pt 0cm;">
For the overall period from 1961 to 2009,
revenues grew at an average annual rate of 7.8 per cent compared to 8.3
per cent for program spending and 8.3 per cent for debt charges. For the
period 1961 to 1990, program spending was sustainable, given that it
grew at an average annual rate of 10.3 per cent as opposed to 10.8 per
cent for revenues. Total spending, however, was unsustainable because of
debt charges, which were growing at 15 per cent. The 1990s, because of
federal fiscal restraint, were actually a sustainable period as revenues
grew faster than program spending and debt charges.</div>
<div style="margin: 0.1pt 0cm;">
Old patterns, however, reasserted
themselves after 2000 as revenue growth failed to keep pace with program
spending. The fiscal situation actually improved because of
historically low interest rates, which served to reduce debt service
costs and provided a generous fiscal dividend to program spending. Much
of this spending in turn was used to enrich transfer payments to the
provinces, especially in the area of health spending. This unsustainable
long-term pattern of finances is independent of the recent run-up in
spending resulting from the federal fiscal stimulus.</div>
<div style="margin: 0.1pt 0cm;">
There is now a rather large fiscal deficit
that needs to be addressed before interest rates start to rise and the
power of compound interest takes effect. According to the Federal Fiscal
Reference Tables, the deficit in 2009-10 was $55.6 billion and for the
first nine months of the 2010-11 fiscal year, the deficit was $27.4
billion, which suggests that the final deficit for 2010-11 could be
about $35 billion or even less.</div>
<div style="margin: 0.1pt 0cm;">
This is actually remarkable progress but
it is largely the result of increasing revenues due to an improving
economy. Indeed, personal income and corporate tax revenues have started
to recover quite nicely, along with the federal GST. Total expenditures
have remained fixed, which is in itself a form of restraint.</div>
<div style="margin: 0.1pt 0cm;">
The risk in the current situation, aside
from a lack of focus due to the political diversion of an election, is
that with recovering revenues we may be lulled into believing that
federal deficits can be self-correcting. That is, simply freeze total
spending and let economic recovery carry us the rest of the way. This is
very tempting and would mean that Canada once again has gotten off
quite lightly in international terms from the ravages of the global
recession.</div>
<div style="margin: 0.1pt 0cm;">
However, this will simply be business as
usual and will not address the long-term structural imbalance that has
caused federal spending overall to rise faster than its revenue base
over the last 50 years. We need to have a discussion as to how to
structure federal finances for the next 25 years so that revenue growth,
at minimum, matches expenditure growth so as to meet the rising program
needs of an aging population in areas like health, home care and income
support.</div>
<div style="margin: 0.1pt 0cm;">
To date, Canada has indeed been extremely
fortunate in its ability to weather the global economic storm, but good
luck is not a long-term basis for fiscal policy. Ignoring a discussion
of federal finances because of short-term improvements in revenues and
economic conditions and expecting that we will continue to do well is
the ultimate federal fiscal fantasy.</div>
</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/some_economic_underpinnings_of_t/">Some Economic Underpinnings of the Arc of Protest</a></h2>
<ul class="post_info">
<li class="post_date">Mar 16, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economics/">economics</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/middle+east/">middle east</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/north+africa/">north africa</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/protest/">protest</a></li>
</ul>
<div class="post_body">
The Middle East and North Africa have been engulfed by a rising
tide of protest and revolt in an arc stretching from Tunisia to
Iran. For some thoughts on the economics underlying these
protests, visit my latest posting at Worthwhile Canadian Initiative. I have also posted below the data used for the graphs on the Arc of Protest which were obtained from the CIA Fact<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_fnQC5dED3bZNxZFWI_rH3nL_rZNnQi2IYTf3xmbRYSAcPhVeFzVIASJiAHHZKQz-KO8HBgklOIMZVy8qQdFus0Ws2wYfGHExNhgE27KfY3qt6v-nrzpxIrv25LlHk-O7GlvB3Gf61Rj3/s1600/-3.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_fnQC5dED3bZNxZFWI_rH3nL_rZNnQi2IYTf3xmbRYSAcPhVeFzVIASJiAHHZKQz-KO8HBgklOIMZVy8qQdFus0Ws2wYfGHExNhgE27KfY3qt6v-nrzpxIrv25LlHk-O7GlvB3Gf61Rj3/s320/-3.jpg" width="320" /></a><br />
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_for_premier/">Northern Economist for Premier?</a></h2>
<ul class="post_info">
<li class="post_date">Mar 15, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/">northwestern ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/premier/">premier</a></li>
</ul>
<div class="post_body">
<h1 class="title" id="page-title">
<span style="font-size: x-small;">From the pages of the Thunder Bay Chronicle-Journal... </span></h1>
<h1 class="title">
The North understood</h1>
<div class="node-type-letter node" id="node-135200">
<div class="node-inner">
<div class="clear-block content">
<div class="field-field-editorial-pubdate field-type-datetime field">
<div class="field-items">
<div class="odd field-item">
Tuesday, March 15, 2011</div>
</div>
</div>
Livio Di Matteo hits the nail on the head in every column he writes
(Another Plan For the North, Commentary, C-J, March 12). I believe he
knows more about Northwestern Ontario than anyone we ever elected,
perhaps alongside Howard Hampton. They both understand the needs of the
North. Di Matteo is absolutely right when he writes that everything we
fight for is a given in southern Ontario. I would like to nominate Di
Matteo as the first premier of the great province of Northwestern
Ontario. Do I have a seconder?<br />
Norman Bowers<br />
Thunder Bay</div>
</div>
</div>
</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/another_plan_for_the_north/">Another Plan for the North</a></h2>
<ul class="post_info">
<li class="post_date">Mar 14, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/growth+plan/">growth plan</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northern+ontario/">northern ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/policy/">policy</a></li>
</ul>
<div class="post_body">
<i>This originally was published in the Thunder Bay Chronicle Journal on March 12, 2011.</i><br />
The release of the Northern Growth Plan is the latest installment in a
long list of plans for Northern Ontario’s economic development
stretching back now almost half-a-century. The Northern Growth
Plan joins an esteemed list of contributions that include the Rosehart
Report (2008), Embracing the Future (2002) and my personal favorite –
Design for Development – which was released in the 1970s – and confused
many people about what the provincial government actually had in mind
for the North given its designation of Thunder Bay and Sudbury as
“primate” growth centers.<br />
The current plan is again the result of many years of work and
consultation and is “a call to action and a roadmap for change”
organized to provide policy direction for growth around six principles:
(1) a globally competitive economy, (2) education and skllls for a
knowledge economy, (3) aboriginal partnership, (4) networks of social,
transport and communications infrastructure, (5) sustainable environment
and (6) innovative partnerships to maximize resource potential.
Really, who can argue with any of that? We all want a diversified
economy, people who are healthy and educated, vibrant communities and a
clean environment. What the provincial government might wish to
explain is why all this is a plan that is “bold and visionary, while at
the same time realistic and sustainable?” What is so bold and
visionary about expecting what other parts of the province have had for
decades?<br />
The plan has a detailed checklist for short, medium and
long-term actions that will require implementation and of course more
planning including regional plans within the region. This is again
more or less what we expect of provincial plans for Northern Ontario
given a literature search of past plans. What is more telling of
this plan is what is not specifically mentioned: nothing on tax
incentive zones, nothing on a regional energy grid, nothing on regional
government, nothing on ever completely four-laning of the trans-Canada
highway.<br />
The Northern Policy Institute was the one positive and tangible
contribution of the plan given that they are going to back it up with 5
million dollars. However, on its own, it almost seems devalued
given that there was nothing specific on energy prices, regional
government or upgrading of the road infrastructure. Moreover, the
mandate of the institute now seems to be not so much independent policy
research but monitoring implementation of the plan. As well, the
NPI was originally proposed in 2006 and it is now 2011 - five years
later. Having brought the institute into existence a couple of
years sooner might have generated some real meat for the Growth Plan and
put us further ahead in regional policy development. Indeed,
having addressed electricity prices a little sooner could have saved
some of the mills and put the region a little further ahead in terms of
employment too.<br />
For whatever reason, the provincial government takes a very long time
to address concerns in this region. The pattern is one of
constant lobbying and reiteration of the same concerns over and over
again, a multitude of plans, and then eventually after a number of years
a small amount of movement on a point or two. That is not to say
that there is no progress but it just takes a lot longer than it does in
southern Ontario. Case in point: five million dollars to fund the
Mowat Policy Institute at the University of Toronto was provided by the
provincial government some time ago.<br />
For us in the North, it appears that we need to spend a lifetime
lobbying for small incremental changes and improvements and this can
wear out the hardiest of individuals. Is it really any surprise
that so many of us just decide to migrate out of the region? The
process of getting the provincial government to facilitate change and
improvement in the North is a process spanning generations – much like
the building of a medieval cathedral. However, the end result for
the medieval peasants and burghers who spent fifty to one hundred years
laboring was a magnificent structure with spires soaring to touch the
face of God. Until demonstrated otherwise, all we have is yet
another plan.<br />
<br />
<br />
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay%E2%80%99s_fiscal_fantasy/">Thunder Bay’s Fiscal Fantasy</a></h2>
<ul class="post_info">
<li class="post_date">Mar 11, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/city+council/">city council</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/">debt</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+affairs/">fiscal affairs</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/taxes/">taxes</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a></li>
</ul>
<div class="post_body">
The recent deliberations leading up to City Council’s approval of
the 2011 operating budget have focused mainly on expenditure items, tax
rates and water rates. Indeed, the approval of a 1.27 per cent
increase in the property tax rate coupled with a 14.3 percent increase
in water rates at a time when gasoline, food and electricity prices are
rising will inevitably cause some distress amongst the city’s citizens
but the public’s response has generally been quite muted. Obviously,
the rates are not high enough yet, which will only encourage our
municipal governors further next year.<br />
What was most disappointing about the budget deliberations was of
course the absence of any meaningful long-term discussions of Thunder
Bay’s fiscal future given the erosion of the tax base, the growing
residential tax burden and the rather large debt load the city has taken
on. This debt load is likely to get much larger given the cost
overruns on the waterfront park development as well as the proposed
Multiplex project, which will inevitably also require some new municipal
debt (that will in turn be used to “leverage” some federal and
provincial contributions). While such construction projects create
jobs, the benefits in terms of employment and company profits are short
term while the debt tends to last forever.<br />
Figure 1 below presents a chart on municipal debt per capita from the
2009 BMA Consulting Group Municipal Study for municipalities in Ontario
with a population greater than 100,000 and ranks them from lowest to
highest. The results show that Thunder Bay is finally ranked number one
in something – the amount of municipal debt per capita, which in this
report stood at $1,974 per capita. Debt per se is not a serious problem
provided that there are reserves to counterbalance them and Thunder
Bay’s municipal reserves are substantial – with the city ranking 8<sup>th</sup>
highest among this same group of municipalities. However, at only
$1,040 per capita at the time of this study, there is obviously a major
fiscal gap here.<br />
<br />
Figure 1<br />
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJhkSAb3-4qTIL-QqPkNgdku_EG-muOSj3XANLA41ojR1YYeJEdhPPfitQHdsQtk4N2N98Zn4shyphenhyphen0qltwNtcd0ehowVHbmA6nbcwjyg823uXvdLQh30EqvYBhmjgJIBFovYHXx3f_LdTeG/s1600/-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJhkSAb3-4qTIL-QqPkNgdku_EG-muOSj3XANLA41ojR1YYeJEdhPPfitQHdsQtk4N2N98Zn4shyphenhyphen0qltwNtcd0ehowVHbmA6nbcwjyg823uXvdLQh30EqvYBhmjgJIBFovYHXx3f_LdTeG/s320/-1.jpg" width="320" /></a><br />
<div style="text-align: center;">
</div>
Can we deal with the situation by raising more revenue? Well,
revenues come mainly from property taxes, user fees and government
grants. Government grants are unlikely to see major increases over the
next few years given the provincial fiscal situation. As for taxes and
users fees, well they have already been raised a lot and indeed much of
the tax burden is now on the residential ratepayer given the erosion of
the industrial base. Indeed, if one compares property taxes for an
average bungalow in Thunder Bay to the other major Northern Ontario
cities, Thunder Bay has the highest. The 2009 BMA Group Municipal study
places those taxes at $2,991 for Thunder Bay, $2,939 for North Bay,
$2,727 for Timmins, $2,434 for Sudbury and $2,301 for Sault Ste. Marie.<br />
City councilors and administrators will inevitably come up with many
ingenious explanations about these comparisons that will focus on how
unique or special our circumstances are, and that we are comparing
‘apples’ with “oranges”. Indeed, if one added up the frequency this
fruit analogy was used by the City of Thunder Bay, one might think that
Northwestern Ontario and not the Niagara peninsula was the fruit belt.
The point is its time to deal with the long-term finances of the City of
Thunder Bay before there is an actual fiscal crisis. One cannot
acquire an ever larger amount of debt without there being consequences
down the road. Thinking otherwise is simply a fiscal fantasy.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/one_hundred_years_of_building_pe/">One Hundred Years of Building Permits at the Lakehead: 1910-2010</a></h2>
<ul class="post_info">
<li class="post_date">Mar 11, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/amalgamation/">amalgamation</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/building+permits/">building permits</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+growth/">economic growth</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a></li>
</ul>
<div class="post_body">
Investment spending is one of the most volatile components of
Gross Domestic Product and construction activity is a major component of
investment. Municipalities issue building permits for new construction
and alterations that fall into the categories of residential,
industrial, commercial and institutional construction. Building permits
are of value as a historical data series because they are a key
indicator of past levels and trends of economic activity via their
documentation of capital formation. Building permit data for the City
of Thunder Bay from 1970 to 2010 as well as the former cities of Port
Arthur and Fort William for the period 1910 to 1969 provides a time
series that gives us a fascinating snapshot of the ebb and flow of
economic activity in Thunder Bay.<br />
The three figures below show the total number of permits issued from
1910 to 2010, their real total value in 2002 dollars and finally their
real value per capita calculated by dividing the real total value by the
city’s population that year. From 1910 to the 1970s, despite cyclical
business fluctuations, the total number of permits (Figure 1) generally
rose and peaked in 1977 at 1,805. They then plunged sharply as a
result of the 1981-82 recession, recovered and then began a long-term
decline from the mid 1980s that only began to reverse starting in 2006.
The large numbers of permits particularly in the 1960s and 1970s were
fueled by residential permits as some years would see housing starts
numbering 700-800 homes.<br />
<br />
Figure 1<br />
<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgt11e520jD5TrwgAjP0Z83jzcnWzL8zdZsFD6PqJQWZj-M0ZyIDhyej34OJXMGTwCV41n6t-soa2DH_x1VapftAwBCLBtZOsdrzSPt5Ersc8QNxngTtK95QuaLS9IQrEzLdIIZo2YVDyWH/s1600/-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgt11e520jD5TrwgAjP0Z83jzcnWzL8zdZsFD6PqJQWZj-M0ZyIDhyej34OJXMGTwCV41n6t-soa2DH_x1VapftAwBCLBtZOsdrzSPt5Ersc8QNxngTtK95QuaLS9IQrEzLdIIZo2YVDyWH/s320/-1.jpg" width="320" /></a><br />
When the inflation adjusted total value of permits is presented
(Figure 2), they show the period from 1910 to the mid 1930s to be one of
intermittent growth and decline while the period from the 1940s to the
mid-1970s one of increasing activity. The real total value of building
permits issued peaks in 1975 at 273.5 million dollars ( in 2002 dollars)
and then embarks on a long-term declined punctuated by the occasional
upsurge. Both Figures 1 and 2 suggest that the 1970s was a watershed
period in the economic history of the Lakehead for the period prior to
that decade was one of growth in economic activity as well as population
while the period since has been one of decline in economic activity and
stagnation in population.<br />
<br />
Figure 2<br />
<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoLQEAG1mR76PA_JBr2PxMQqNM1qXBsVcouGAuZQQfjGP66k6vtnnSz4stam29lmlB5zGpfZl8SoUPgyZUNGR7FNLYc14Nzq1jYAIBgETIlslefx3Y5tBiXmFDcRdDXDCPKGodfuhnjkZA/s1600/-2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoLQEAG1mR76PA_JBr2PxMQqNM1qXBsVcouGAuZQQfjGP66k6vtnnSz4stam29lmlB5zGpfZl8SoUPgyZUNGR7FNLYc14Nzq1jYAIBgETIlslefx3Y5tBiXmFDcRdDXDCPKGodfuhnjkZA/s320/-2.jpg" width="320" /></a><br />
This pattern is also documented in the last figure, which plots the
real value per capita of building permits (Figure 3). This figure again
shows an increase in the real value of permits per person up until the
1970s and then a general decline afterwards – with one glaring exception
being the years of the wheat boom from 1910 -1913. During those years,
the largest per person values for permits are recorded with a peak
value in 1912 of almost 4,000 dollars. This was at the height of the
wheat boom era when the infrastructure of the Lakehead as the world’s
largest grain port was being laid. In the years that followed, this
dizzying height in per capita permit values was never matched and even
the peak in 1975 only represents the third highest real per capita value
in the years between 1910 and 2010.<br />
<br />
Figure 3<br />
<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeU4OmYMEuP32tGx782xJV515OIo2EWA8ZR798il4faRrKfghvzDs6JnyWzpabUErPTB2Y3D4ksZlQfzFD5syMFgoUl108XlUqZRArd4b2TVN5D3Jg8a4EcE0Sag128gc3c4bIYo5Ky7bd/s1600/-3.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeU4OmYMEuP32tGx782xJV515OIo2EWA8ZR798il4faRrKfghvzDs6JnyWzpabUErPTB2Y3D4ksZlQfzFD5syMFgoUl108XlUqZRArd4b2TVN5D3Jg8a4EcE0Sag128gc3c4bIYo5Ky7bd/s320/-3.jpg" width="320" /></a><br />
The decline in economic activity at the Lakehead that commences in
the 1970s is a function of many things such as increasing technological
change in resource production that reduced employment in the resource
sector, shifting grain markets that reduced the role of the port, and
the end of the baby boom that then also ended the construction boom. Of
course, one cannot also help noticing that the slowdown begins in the
mid-1970s, right after the amalgamation in 1970 of the twin cities of
Port Arthur and Fort William along with several of the adjoining
townships. One cannot help but wonder if the intense urban competition
and rivalry between the former cities of Port Arthur and Fort William
was also a factor in spurring growth up until the 1970s. The
elimination of that competition in the 1970s may have created an
environment where new ideas and change were more difficult to implement
because of the lack of jostling for advantage. The creation of a
monopoly municipal government at the Lakehead may in the end have been
yet another factor in the region’s long-term economic decline.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_joins_worthwh/">Northern Economist Joins Worthwhile Canadian Initiative</a></h2>
<ul class="post_info">
<li class="post_date">Mar 10, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/">ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/worthwhile+canadian+initiative/">worthwhile canadian initiative</a></li>
</ul>
<div class="post_body">
I am delighted to join the team of Stephen Gordon, Frances
Woolley, Mike Moffat and Nicholas Rowe who post at Worthwhile Canadian
Initiative, Canada's major economic policy blog. I will be posting
economic policy pieces there as well as continuing to post more Northern
Ontario themed issues here at Northern Economist. As pieces appear on
WCI, I will also post links on this site so you can visit. My first
post on WCI: Is Ontario In Decline?</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/what%E2%80%99s_up_with_charlie_sheen__/">What’s Up With Charlie Sheen: Meltdown or Marketing?</a></h2>
<ul class="post_info">
<li class="post_date">Mar 5, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/charlie+sheen/">charlie sheen</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+rents/">economic rents</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/marketing/">marketing</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/meltdown/">meltdown</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/publicity/">publicity</a></li>
</ul>
<div class="post_body">
<div style="margin: 0.1pt 0cm;">
Charlie Sheen’s recent antics may seem
indicative of a meltdown but could they also have an economic
interpretation? At first glance, his outburst against the producers of
Two-And-A-Half-Men may seem to be an economically self-destructive
activity given that production on the show is now halted. The show was
apparently renewed and slated to run until 2011-12. However, that show
is now into its eighth season, which makes the ratings more difficult to
sustain (though the show has been performing very well), and given the
number of personal issues Mr. Sheen has been having over the last few
years the possibility of yet another season was becoming ever more
problematic. The recent meltdown and media rants have certainly
garnered Mr. Sheen an extraordinary amount of media attention and a rise
in his web presence (See the Google Trends graph below). If it looks
like you are not going to be able to sustain your activity for the next
couple of years due to rehab and other personal issues, why not pull the
plug now and try to cash out on the surge of celebrity. Notoriety can
also be a source of economic rents. In a sense, Mr. Sheen may be trying
to re-invent his career under the mantra that bad publicity is better
than no publicity at all. He is apparently trying to negotiate a 10 million dollar book deal and Charlie Sheen will get an animated special on U.S. cable network Spike TV called Charlie Sgheen's Winningest Monents that will premiere March 9 at 10:30 p.m. ET, on the U.S. cable network
Spike. Of course, there is no guarantee such a strategy will work but
borrowing from the immortal words of Mr. Sheen, if you are tired of
pretending you are not special, what else can you do? In Hollywood,
being special is what it is all about.</div>
<div style="margin: 0.1pt 0cm;">
<br /></div>
<div style="margin: 0.1pt 0cm;">
"Charlie Sheen" Google Trends Search</div>
<div style="text-align: center;">
</div>
<br />
<div style="margin: 0.1pt 0cm;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4IPJBY7rvOKfb9QekQ6_LVcQ8p_nn8N9nkrrmVvCbAgYmrK1zUSrwXCwzSotPP1HX2zY3CKuraSVdkR6GFaJspMT3mlrqQmNq4UIkMfyiXfnjLEM0491Evip1YW8JmSfKZrAey1-Ghy_N/s1600/-4.jpg" imageanchor="1"><img border="0" height="143" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4IPJBY7rvOKfb9QekQ6_LVcQ8p_nn8N9nkrrmVvCbAgYmrK1zUSrwXCwzSotPP1HX2zY3CKuraSVdkR6GFaJspMT3mlrqQmNq4UIkMfyiXfnjLEM0491Evip1YW8JmSfKZrAey1-Ghy_N/s320/-4.jpg" width="320" /></a></div>
</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/is_federal_spending_sustainable/">Is Federal Spending Sustainable?</a></h2>
<ul class="post_info">
<li class="post_date">Mar 5, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/deficit/">deficit</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/expenditures/">expenditures</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+government/">federal government</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/revenues/">revenues</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/sustainability/">sustainability</a></li>
</ul>
<div class="post_body">
As budget season approaches, a quick survey of Canada’s long-term
federal finances is definitely in order. Figure 1 below plots federal
government revenues and total expenditures for the entire period 1961 to
2009 using data from the 2010 Fiscal ?Reference Tables. While the period from 1961 to the mid-1970s was largely balanced
budgets, the impact of the post-1973 oil price shock, productivity
decline, stagflation and high interest rates is demonstrated in the
widening deficit gap which is not closed until the restrictive fiscal
policies of the mid 1990s. The new era of budget surpluses lasts until
2008-9 when there is a 5.8 billion dollar deficit followed by 55.6
billion the year after.<br />
<br />
Figure 1<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7qo4eVYpekw59MykTLNvW8Hp6OtK363Usw-aYHxt9DevrQ0BAcW9uXGKiypO962bCZM1lG20Z1NH1OG54S_EZ-LkxflRYGKMZZwR3gjujb1m8IpgvgrEGorYRisRfbUueRtGABu1nucM5/s1600/-5.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7qo4eVYpekw59MykTLNvW8Hp6OtK363Usw-aYHxt9DevrQ0BAcW9uXGKiypO962bCZM1lG20Z1NH1OG54S_EZ-LkxflRYGKMZZwR3gjujb1m8IpgvgrEGorYRisRfbUueRtGABu1nucM5/s320/-5.jpg" width="320" /></a><br />
As we move towards the March 22<sup>nd</sup> budget date, the
question is whether federal spending is sustainable – that is does the
increase in the resource base match the increase in spending? Figure 2
presents the average annual growth rates for federal revenues as well as
program spending, debt charges and total spending. The results suggest
that federal spending has been largely unsustainable for much of the
last 50 years unless there is a concerted effort to rein it in as during
the fiscal restraint of the 1990s. For the overall period from 1961 to
2009, revenues have grown at an average annual rate of 7.8 per cent
compared to 8.3 percent for program spending and 8.3 percent for debt
charges. For the period 1961 to 1990, program spending was sustainable
given that it grew at an average annual rate of 10.3 per cent as opposed
to 10.8 percent for revenues. However, total spending was
unsustainable because of debt charges, which were growing at 15 per
cent. The 1990s, because of fiscal restraint, was a sustainable period
as revenues grew faster than program spending and debt charges.
However, old patterns re-asserted themselves after 2000 as revenue
growth has failed to keep pace with program spending. The situation has
only not been worse because of historically low interest rates, which
have served to reduce debt service costs. For another perspective on
the federal fiscal situation focusing on expenditure and revenue
composition, you might want to check out Stephen Gordon’s latest piece
at Worthwhile Canadian Initiative.<br />
<br />
Figure 2<br />
<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlycEeOVbHtH4KLWkx2_ERdQ4i9wGhjU-uJb8XL30TP3eO2NP_IP2jQI1MmeJU4V9Yul66kN3OpzkXyIay8r0MQM-_LRaRMVhnG9Q38TiRRAbLnSgkUrRDGHrJcuJhyphenhyphenMgyULepDokJvwgS/s1600/-6.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjlycEeOVbHtH4KLWkx2_ERdQ4i9wGhjU-uJb8XL30TP3eO2NP_IP2jQI1MmeJU4V9Yul66kN3OpzkXyIay8r0MQM-_LRaRMVhnG9Q38TiRRAbLnSgkUrRDGHrJcuJhyphenhyphenMgyULepDokJvwgS/s320/-6.jpg" width="320" /></a></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/canada%E2%80%99s_evolving_export_secto/">Canada’s Evolving Export Sector: The Empire Strikes Back</a></h2>
<ul class="post_info">
<li class="post_date">Mar 2, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/exports/">exports</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/">gdp</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/trade/">trade</a></li>
</ul>
<div class="post_body">
Canada is usually referred to as a small open economy. The
evidence for this usually lies in the high export to GDP and import to
GDP ratios. Exports in particular are extremely important as they allow
us to earn a substantial portion of our income. Over the last thirty
years, the export to GDP ratio has averaged almost thirty percent, which
means that their absence would essentially amount to a 30 per cent pay
cut for the Canadian economy.<br />
<br />
The two accompanying figures present a long-term perspective on our
export sector. The first figure plots the export to GDP ratio from 1886
to 2010 (it is actually GNP rather than GDP for the period before 1975)
using data from Historical Statistics of Canada and Statistics Canada.
The results are intriguing as they document the rise of our export
sector – particularly since 1960. Although Canada has always been an
exporting nation, it was only with the First World War that Canada’s
export to national income ratio rose above 20 per cent only to collapse
with the onset of the Great Depression. The ratio again rises with the
Second World War and then declines in the immediate post-war period but
starting in the 1960s starts to climb peaking in the year 2000 at about
40 percent. Since the year 2000, Canada’s export to national income
ratio has declined from this dizzying height to reach about 25 per
cent. We appear to be back where we were before the onset of the Free
Trade Agreement with the United States. <br />
<b>Figure 1</b><br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGAuCnQ1Cv26SjxtizCS9J9a68VR6m7EkdHzZpc5dn_QEG2e209x5vjhkWzgPunPQCQofFoPKQtQ8eWSDn7c-2QQWFMEkZAd79y3voQChlTJfXZ4u3tTf-Ae4karKJJImTe3JTZoqx-Re0/s1600/-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGAuCnQ1Cv26SjxtizCS9J9a68VR6m7EkdHzZpc5dn_QEG2e209x5vjhkWzgPunPQCQofFoPKQtQ8eWSDn7c-2QQWFMEkZAd79y3voQChlTJfXZ4u3tTf-Ae4karKJJImTe3JTZoqx-Re0/s320/-1.jpg" width="320" /></a><br />
Figure 2 suggests that if we are to see a rise in the export to GDP
ratio in coming years, we may have to look beyond the U.S. market. This
is not necessarily a surprise as Canada’s trade patterns have shifted
over time. The United Kingdom used to be the most important destination
for our exports and that was eventually replaced by the United States.
However, the last decade has seen the share of our exports going to the
United States also decline – from a peak of 84 percent in 2000 to only
73 percent in 2010. This has been made up by an increase in exports to
the UK (from 4 to 5 percent) and most significantly, to All Other
Countries (from 12 to 22 per cent). Canada’s trade patterns appear to
be diversifying away from the United States and we are now heading back
to territory we last occupied in the mid-1970s. In 1975, the United
States accounted for about 66 per cent of our exports, the UK had seven
per cent and All Other Countries 27 percent.<br />
<b>Figure 2</b><br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMPoNfTGosW6ya9djJIrXFYNNOzU2-aXJ9ZwgukyuIKbP-vTvOu5RfhsfMUlBrh_5Fmv018qMuUIvfeiSK8nqGFwNVUmoNwmwD6LJZs3x5joT1O0S5uEsmjP79KaiPQCaMBZwXGuYpESO4/s1600/-2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhMPoNfTGosW6ya9djJIrXFYNNOzU2-aXJ9ZwgukyuIKbP-vTvOu5RfhsfMUlBrh_5Fmv018qMuUIvfeiSK8nqGFwNVUmoNwmwD6LJZs3x5joT1O0S5uEsmjP79KaiPQCaMBZwXGuYpESO4/s320/-2.jpg" width="320" /></a><br />
Our exports dropped significantly in 2009 due to the impact of the
recession but began to recover in 2010. The total value of Canadian
exports in 2010 rose by 9.5 per cent. However, exports to the United
States rose by 9.2 per cent while exports to Japan rose 9.5 percent and
exports to the other OECD countries rose 9.9 percent. And as for the
UK, exports to the UK rose by 36 percent in 2010! It would appear that
when it comes to trade patterns for Canada, tomorrow is yesterday and
the Empire has struck back. However, we will need to wait and see if
this trend persists and the UK share of our exports returns to the
levels of a century ago.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/obesity_and_gdp__do_richer_count/">Obesity and GDP: Do Richer Countries Just Eat More?</a></h2>
<ul class="post_info">
<li class="post_date">Mar 2, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/gdp/">gdp</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/">health</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/obesity/">obesity</a></li>
</ul>
<div class="post_body">
Statistics Canada Daily has just reported on an article on the prevalence of adult obesity in
Canada and the United States. In the United States, the National Health
and Nutrition Examination Survey (NHANES) has been gathering measured
height and weight data for years. In 2007, the Canadian Health Measures
Survey (CHMS) began collecting direct measurements of height, weight,
body mass index (BMI), skinfolds and waist circumference from a
nationally representative sample of the population. The nature of these
surveys has created an opportunity to compare rates of obesity among
adults in Canada and the United States. The results show that from
2007 to 2009, the prevalence of obesity (defined as a BMI of 30 or
greater) in Canada was 24.1%, over 10 percentage points lower than in
the United States (34.4%). Among men, the prevalence of obesity was
over 8 percentage points lower in Canada than in the United States
(24.3% compared with 32.6%) and among women, more than 12 percentage
points lower (23.9% compared with 36.2%)<br />
<br />
The interesting question is what may account for the difference? Is
it lifestyle? Cultural preferences? Given the similarities between
Canada and the United States, it is difficult to see what major cultural
or lifestyle differences could account for such a difference. One
major difference between the two countries is economic – the difference
in per capita GDP. It could be differences in the material standard of
living as captured by GDP affect the resources available for food
consumption. However, the relationship between income, food consumption
and obesity need not necessarily be positively correlated, as it would
also depend on whether food is a normal or inferior good. Moreover,
income and education are also correlated and it could be that countries
with higher incomes have better educated populations and therefore are
more knowledgeable about health and food consumption meaning the
relationship between BMI and income could be negative rather than
positive.<br />
<br />
This relationship is checked out using health data for selected OECD countries: those for whom a recent estimate is available for both the
percent of population that is obese - that is had a BMI greater than
thirty - as well as per capita GDP. The per capita GDP is in U.S.
purchasing power parity dollars. The results are presented in Table 1
for 14 OECD countries including Canada and the United States and are
ranked by obesity. The United States tops the list at 27.5 percent of
the population as obese while Italy is last at only 9.9 percent. When a
graph (see Figure 1) with a trend line is plotted between income and
the percent obese, the results show a negative relationship. That is,
higher income is generally associated with a lower BMI – with one
obvious outlier. The United States, with the second highest per capita
GDP of these 14 countries (Norway was first) also has the highest
percent of obese population and its data point is off on its own in the
northeast corner of the graph. These results suggest that in general,
the relationship between income and obesity at the national level is
negative. The United States is definitely exceptional in being a
high-income country with high obesity rates.<br />
<b>Table 1</b><br />
<br />
<b><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkzqYMwBZnit9l0rhuEHOCEaPLv-DWVoh5R1wTYhXx83ZWz3PStByY2DATJ6Orjgjhlu92QHbinwWoWw_p3Q-t7FLiEuB4cNcHxKlzkDBkD_X2tXMbmV0CCWptXFD90zDVAGrCphRPaRU7/s1600/-3.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkzqYMwBZnit9l0rhuEHOCEaPLv-DWVoh5R1wTYhXx83ZWz3PStByY2DATJ6Orjgjhlu92QHbinwWoWw_p3Q-t7FLiEuB4cNcHxKlzkDBkD_X2tXMbmV0CCWptXFD90zDVAGrCphRPaRU7/s320/-3.jpg" width="320" /></a> </b><br />
<div style="text-align: center;">
</div>
<div style="text-align: left;">
<b>Figure 1</b></div>
<div style="text-align: center;">
</div>
<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG9CxpJ9ZiJvIZ0vGraqwTmTOnWp5dHvEXr1NJc9-wV-mS1vyC5illFPNBMgJXmRcb6jKgUbhpeJF1LkZ4bKw5h6KbeI_06H4b4lFf0J3aKNIfFf_BCUuyHZAA7xrnUmUeKUwcv6w0avMW/s1600/-4.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG9CxpJ9ZiJvIZ0vGraqwTmTOnWp5dHvEXr1NJc9-wV-mS1vyC5illFPNBMgJXmRcb6jKgUbhpeJF1LkZ4bKw5h6KbeI_06H4b4lFf0J3aKNIfFf_BCUuyHZAA7xrnUmUeKUwcv6w0avMW/s320/-4.jpg" width="320" /></a></div>
</div>
<br />
<br /></div>
</div>
Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-75800049538787152132016-12-14T06:02:00.004-08:002017-05-28T05:47:46.632-07:00February 2011 Posts<h1>
12 Posts from February 2011 </h1>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/health_spending__the_territories/">Health Spending: The Territories Versus the The Provinces</a></h2>
<ul class="post_info">
<li class="post_date">Feb 26, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/">provinces</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/public+health+spending/">public health spending</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/territories/">territories</a></li>
</ul>
<div class="post_body">
Whenever numbers for public sector health spending in Canada are
presented, the national totals invariably obscure regional stories and
when those regional stories are told they inevitably focus on the
provinces. It is interesting when examining government health
expenditure numbers to separate out the territorial governments. The
accompanying figure presents real per capita (in 1997 dollars)
government health spending numbers from the Canadian Institute for
Health Information for the period 1975 to 2010 for the Yukon, the
Northwest Territories and Nunavut (after 1998). There is also
alongside the combined figure for the remaining ten
provinces. The upward trend is obvious for health spending,
though per capita spending totals are more pronounced for the
territories as opposed to the provinces. Real per capita government
health spending in Canada is highest in the sparsely populated
territories due to factors like high transportation costs as well as the
absence of economies of scale when providing health care in such low
population density regions. In 2010, real per capita government
health spending was approximately 2,580 dollars in the provinces
compared to 3,740 dollars in the Yukon, 4,280 dollars in the Northwest
Territories and 6,000 dollars in Nunavut. Between the years 2000
and 2010, real per capita government health expenditures grew 46 percent
in the Yukon, 19 percent in the Northwest Territories, 29 percent in
Nunavut and 34 percent in The Provinces. What is interesting is
how closely real per capita government health spending in the
territories tracked the provinces from 1975 to 1985. After 1985,
the Northwest Territories moves away from The Provinces as well as the
Yukon while the Yukon pulls away from The Provinces in the early
1990s. Is population aging a factor? Interestingly enough,
while the population in the three territories is “aging”, the proportion
of population over age 65 is still substantially less than that for The
Provinces. Health spending in the territories is currently for a
relatively younger population than for the rest of the country.
Given that health spending rises with age, real per capita health
spending in the territories would probably be even higher if its age
distribution resembled that of the provinces.<br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimE7EiGBoOWDD6ax8YeJx1pOBb6IKdH8WBfy4cs3YEwQwyyEr3rE4qXI6sspLxbpMdirFIjLQx7PD3xxwSPlaqc7vtTcXMChMl3SNi9Q_DXqCeTjzqxqHxoIDA2klCCV8nIGNbRnwfvkv8/s1600/a_003.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimE7EiGBoOWDD6ax8YeJx1pOBb6IKdH8WBfy4cs3YEwQwyyEr3rE4qXI6sspLxbpMdirFIjLQx7PD3xxwSPlaqc7vtTcXMChMl3SNi9Q_DXqCeTjzqxqHxoIDA2klCCV8nIGNbRnwfvkv8/s320/a_003.jpg" width="320" /></a></div>
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/why_big_cities_still_matter_desp/">Why Big Cities Still Matter (Despite the Internet)</a></h2>
<ul class="post_info">
<li class="post_date">Feb 26, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/internet/">internet</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/new+york/">new york</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/social+network/">social network</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/technology/">technology</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/urbanization/">urbanization</a></li>
</ul>
<div class="post_body">
It is often remarked that place no longer matters as much in the
new knowledge economy. Provided you have a net connection, you can
do business around the world from the most geographically obscure and
out of the way places. Indeed, you can retire to a bucolic
paradise far away from the congestion and bustle of a large metropolitan
center with its smog, traffic and chaos and plug into the many
opportunities of the knowledge economy or engage in net-based
commerce. In the long run, one would expect the elites of the
world to migrate away from the large cities leaving them to the poor
rabble. Yet, a visit to the quintessential world metropolitan
center of New York provides a telling lesson as to why that is not
necessarily the case.<br />
The metropolitan statistical area of New York-Northern New
Jersey-Long Island, NY-NJ-PA has a population of 19 million people with
the city of New York itself at about 8 million people of whom 1.6
million are clustered into the 59 square kilometers of Manhattan.
New York and region is incredibly, noisy, congested, expensive, and a
constant assault on the senses and yet since 2000 has added over 700,000
people to its population – an increase of about four percent.<br />
The obvious economic advantages of being in a large densely populated
market area are not enough to explain why New York is still such a
desirable place to be. Despite the internet and online social
networks, living and working in New York is ultimately being a part of
the original <i>living social network </i>- a giant stage play where
everyone has a part in seeing and being seen. From the wealthiest
dealmaker or broker, to the doorman at the hotel, to the worker behind
the deli counter, being in New York is being in a dense population pool
of opportunity and interaction. The density of population offers
agglomeration and scale economies as well as what can best be termed as
the <i>interaction economies</i> of face-to-face contact in what is
the greatest city in the world. There are simply millions of
people to meet and deal with in all walks of life. This knowledge
provides an energy and intensity of interaction that is ultimately an
end in itself. Whatever your chosen field, the top performers in
that field eat, shop, live, play and dine together in a social setting
that provides a context for comparison of relative success and further
spurs competition. This energized engagement even extends to
events such as a Broadway play where the applause and cheers of an
audience <i>during the performance</i> interrupts and lets the
performers know how they are doing. In New York, silence is not
the quiet affirmative, it is failure.<br />
In the end, it is all about the social dimension. The Internet
does offer business opportunities in areas far away from your own modest
abode but the human element is absent and being human is what it's all
about. Being human is why large cities will continue to grow and
why social institutions that focus on human face-to-face contact will
continue to thrive albeit with the assistance of technology.<br />
<br />
<div style="text-align: center;">
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</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/thunder_bay_investment_trends_sh/">Thunder Bay Investment Trends Show Improvement</a></h2>
<ul class="post_info">
<li class="post_date">Feb 21, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/building+permits/">building permits</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economic+activity/">economic activity</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/investment/">investment</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a></li>
</ul>
<div class="post_body">
<br />
The building permits issued by the City of Thunder Bay as reported by the Thunder Bay <a href="http://www.thunderbay.ca/CEDC.htm">Community Economic Development Corporation</a>
(CEDC) provide an indicator on investment spending in the areas of
residential, commercial, industrial and institutional
investment. The total number of permits issued declined from
1990 to 2006 but since 2006 there has been an upward trend in the
number of permits issued and 2010 –at 1,252 permits - represents the
best year since 1993 (See Figure 1). Along with the number of
permits, their total value is also important as an indicator of how
much new investment spending is being injected into the local economy.
The total value of permits exhibited a downward trend from 1990 to 2000
but since 2000 has also shown an increasing trend with some
fluctuations. In 2010, 151.3 million dollars worth of
permits were issued – up dramatically from 71.3 million dollars in
2009.<br />
<b>Figure 1</b><br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiH4y5GgOIk87sWkHyMfj1oJ4MnCa1qan-pRitEqY_c0nTF2kYzN7Q9BSA17hderwbeazZ-O3kPeD0VzRH1XHCzHCtgRNYWwHU89EyWmcDl6XPa2emR9gw2QPVvnvXEWHdDNguZIZOBPoW/s1600/a_008.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiH4y5GgOIk87sWkHyMfj1oJ4MnCa1qan-pRitEqY_c0nTF2kYzN7Q9BSA17hderwbeazZ-O3kPeD0VzRH1XHCzHCtgRNYWwHU89EyWmcDl6XPa2emR9gw2QPVvnvXEWHdDNguZIZOBPoW/s320/a_008.jpg" width="320" /></a></div>
<br />
As Figure 2 illustrates, since 2001, the value of residential permits
has exhibited a recovery while commercial permits have also seen an
increase. On the other hand, industrial and institutional permits
have not seen a similar recovery. In some respects, these trends
represent both the past and the future. The 1990s were generally a
poor period in Thunder Bay’s economy and this weak performance was
reflected by a downward trend in the value of all permit
categories. The forest sector crisis has meant that since 2000,
the value of industrial permits has continued to be low. However,
the transitioning of Thunder Bay to a more knowledge intensive economy,
opportunities in mining and a growing aboriginal population have seen
investment activity pick up especially in the residential and commercial
sectors.<br />
<b>Figure 2</b><br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDsqVMQ0yZObPmD6Obs7N8QkaEEQSR3udZbIWGZzJ5RrA-H9yCJ_BLEckkwMDfa_gmhSvrWjnHFtO3m7XuWJaTmbqUBm8HmPUUKpEo7po7UslETTjMXLkTTtB-xzTxbQU7RSyQqUHbM4ZZ/s1600/a_004.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDsqVMQ0yZObPmD6Obs7N8QkaEEQSR3udZbIWGZzJ5RrA-H9yCJ_BLEckkwMDfa_gmhSvrWjnHFtO3m7XuWJaTmbqUBm8HmPUUKpEo7po7UslETTjMXLkTTtB-xzTxbQU7RSyQqUHbM4ZZ/s320/a_004.jpg" width="320" /></a></div>
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/debt_interest_and_provincial_spe/">Debt Interest and Provincial Spending: A Longer Term View</a></h2>
<ul class="post_info">
<li class="post_date">Feb 21, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/debt/">debt</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+policy/">fiscal policy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/interest+rates/">interest rates</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/">provinces</a></li>
</ul>
<div class="post_body">
As interest rates begin to creep upward, one of the main impacts
will be on debt holders as they are faced with higher payments to
service their debts. Governments in Canada will be no exception
and it is interesting to examine provincial government debt service
costs to see which provinces may be most sensitive to a tightening of
interest rates. Figure 1 below plots real per capita debt service
costs (1997 dollars) for each province for the period 1075 to 2008 –
ending just on the cusp of the great recession and financial crisis
which sparked a big increase in provincial debt. As the graph
shows, rising interest rates and debt during the 1980s saw a steep rise
in per capita debt service costs, which peaked in the mid-1990s and then
came down. This decline represents an enormous fiscal dividend
that the provinces used in part to reduce taxes but also to increase
their program spending as Figure 2 reveals. At the end of this
time period, the highest per capita debt service costs were being paid
by Quebec at just over $1,000 per capita, followed by New Brunswick at
about $880 dollars and then Newfoundland and Labrador at $830. The
lowest costs were incurred by Alberta at about $120 per capita, then
British Columbia at $420 and then Ontario at $560. These numbers
suggest that the provinces that are most sensitive to a fiscal squeeze
brought on by rising interest rates and debt brought on by the recession
will be Quebec and the Atlantic provinces in the east and probably
Manitoba in the west. After debt service costs are paid, what is
left is spending on programs. Newfoundland ranks first in real per
capita program (followed by Alberta, PEI and Quebec) spending as of 2008
while Ontario ranks last among the ten provinces. Those provinces
with higher per capita program spending and very high per capita debt
service costs (for example, Quebec and Newfoundland) can be expected to
feel relatively greater fiscal pain than the other provinces).<br />
<br />
Figure 1<br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_Ct77JXPuldG2CpGN4JFqhx7rcuTatbSn4Nl-_wNYg9zhyHqaTZQvfV9e65p1mtmmH0rCo1jnpQejMAzTiPJQBc4RahWmM7vi0on_eCms7S-oToMXe4TAH27PtpVnVpQIlKl9M_FiHrDv/s1600/a_006.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_Ct77JXPuldG2CpGN4JFqhx7rcuTatbSn4Nl-_wNYg9zhyHqaTZQvfV9e65p1mtmmH0rCo1jnpQejMAzTiPJQBc4RahWmM7vi0on_eCms7S-oToMXe4TAH27PtpVnVpQIlKl9M_FiHrDv/s320/a_006.jpg" width="320" /></a></div>
<br />
Figure 2<br />
<br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim4oxHX6M7R4tP_HMec7VmCRqb57pY1IW9TLaSaCZ3juAdU8hQiH-eImvCSu-T6c-0Rt9aKqsTg2Q7QBV9mUFaQkYs1R6DhYkGuGwVmeXyU3YvcT3WGRwRs6w53MUS0_CWIRdQksUYZJh4/s1600/a.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEim4oxHX6M7R4tP_HMec7VmCRqb57pY1IW9TLaSaCZ3juAdU8hQiH-eImvCSu-T6c-0Rt9aKqsTg2Q7QBV9mUFaQkYs1R6DhYkGuGwVmeXyU3YvcT3WGRwRs6w53MUS0_CWIRdQksUYZJh4/s320/a.jpg" width="320" /></a></div>
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/provinces_face_transfer_cuts/">Provinces face transfer cuts</a></h2>
<ul class="post_info">
<li class="post_date">Feb 18, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/equalization/">equalization</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/medicare/">medicare</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/">provinces</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transfer+payments/">transfer payments</a></li>
</ul>
<div class="post_body">
Originally appeared in the <a href="http://www.financialpost.com/">Financial Post</a>, February 14, 2011<br />
<br />
<b><i>60% of federal spending is now transfers of one type or another</i></b><br />
<b>By Livio Di Matteo </b><br />
Transfer payments from Ottawa to the provinces have been a feature of
the Canadian federation since 1867. Federal transfers began with the
Dominion subsidies that provided the provinces with a per-capita payment
that essentially acknowledged the new federal government’s stronger tax
base. Since then, transfers to the provinces have grown, with the
creation of Equalization in 1957 and then health transfers as a result
of the Medicare Act of 1966.<br />
Today Ottawa transfers about $56-billion to the provincial and
territorial governments, the three main provincial transfer programs
being the Canada Health Transfer at $27-billion, the Canada Social
Transfer (for child, post-secondary education and social programs) at
$12-billion and Equalization (funds for those provinces with a weaker
fiscal capacity) at almost $15-billion.<br />
Equalization payments were recently reformed with a new funding
formula, but attention is now shifting to health transfers, as the
generous funding provisions of the Health Accord reached in 2004 will
expire in 2014. The Canada Health Transfer to the provinces has grown
from $20.3- billion in 2005 to $27-billion in 2011 — an annual growth
rate of nearly 6%.<br />
Given the recent recession and the slowdown in economic growth
combined with large federal deficits, the odds are high that the growth
rate of these transfers will be circumscribed. However, public health
spending over the last five years has grown at a rate of just over 6%
annually. Needless to say, there will be a scramble to curtail health
costs should health transfers not continue in a manner the provinces
have grown accustomed to.<br />
However, the situation is more complicated than that because the
federal government not only transfers money to provincial governments
but it also transfers money to individuals via income support programs
and to bond holders via debt interest payments. Indeed, the role of the
federal government over the last 50 years has morphed into a giant
check-writing agency. In 2009, along with sending $56-billion to the
provincial and territorial governments, it also sent $69-billion to
persons (e.g. Old age security, guaranteed income supplements) and
another $29-billion to Canadian bondholders as debt interest payments.
As a result, almost 60% of federal expenditures is now transfers of one
type or another, with the other 40% going to the provision of public
goods and services that we usually associate with government. In the
early 1960s, the division was the other way around.<br />
If one looks back over the last 20 years, one sees that the share of
federal spending accounted for by transfers to persons has stayed
approximately constant at 25%. After declining in the 1990s, the share
of federal spending going to provincial and territorial government
transfers has grown from 14% to about 21%.<br />
Meanwhile, the share of spending going towards debt service dropped
from a peak of 30% in the mid-1990s to about 10% at present. The federal
fiscal dividend from its balanced budget and the lowest interest rates
in 40 years went to increased provincial transfer spending as well as
some tax relief at the federal level. Since 1990, total federal
transfers to the provinces have grown by 140% while total federal
spending has only grown by 79%.<br />
However, the federal government again has a deficit and mounting debt
and debt service costs. Maintaining the growth rate of health and other
transfers to the provinces at the rates of the last decade will be much
more difficult if interest rates begin to spike upward. Servicing the
growing debt will require either cuts to transfers or cuts to programs
and services. The calculus is bleak.<br />
Given that transfers now make up the lion’s share of federal
spending, transfer reductions will also make up the lion’s share of
federal spending restraint. What transfers to reduce? It won’t be debt
interest unless Canada decides to make history by joining the
international list of sovereign defaulters. That leaves transfers to
persons and transfers to other governments.<br />
If the federal government must choose between affecting voters
directly via cuts to personal transfers or indirectly by hitting their
provincial governments, then the choice is obvious. The provinces are
heading towards transfer restraint.<br />
<i>Livio Di Matteo is professor of economics at Lakehead University.</i><br />
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/northern_economist_in_maclean%E2%80%99/">Northern Economist in Maclean’s Magazine!</a></h2>
<ul class="post_info">
<li class="post_date">Feb 16, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/chart+of+the+week/">chart of the week</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/macleans/">macleans</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/">ontario</a></li>
</ul>
<div class="post_body">
Northern Economist has generated a mention in the business section of <a href="http://www2.macleans.ca/2011/02/11/the-biggest-spender/">Maclean’s</a>
magazine under the Chart of the Week: Canada’s Biggest Spender.
The chart reproduces the graph used as part of my presentation to the <a href="http://www.ontla.on.ca/web/committee-proceedings/committee_transcripts_details.do?locale=en&Date=2011-01-31&ParlCommID=8858&BillID=&Business=Pre-budget+consultations&DocumentID=25498">Ontario Standing Committee on Finance and Economic Affairs on January 31<sup>st</sup></a>
detailing the net debt to GDP ratio for the federal government and
Ontario. The slides used for my presentation are available on my <a href="http://economics.lakeheadu.ca/dimatteo/work.html">university web page</a>.</div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/questions_for_dalton_mcguinty/">Questions for Dalton McGuinty</a></h2>
<ul class="post_info">
<li class="post_date">Feb 14, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/economy/">economy</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/electricity/">electricity</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/hst/">hst</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/mining/">mining</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/northwestern+ontario/">northwestern ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/ontario/">ontario</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/premier+mcguinty/">premier mcguinty</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/regional+government/">regional government</a></li>
</ul>
<div class="post_body">
The Honourable Dalton McGuinty, Premier of Ontario will be in Thunder Bay on Thursday February 17<sup>th</sup> to participate in an informative luncheon on Ontario’s plan for jobs and growth sponsored by the <a href="http://www.tb-chamber.on.ca/">Thunder Bay Chamber of Commerce.</a>
The Premier will undoubtedly use the opportunity to promote his
economic vision for Ontario in the wake of the recent recession and into
the challenges of the next decade especially given the looming October
election. This will hopefully also provide an opportunity for the
audience to ask Premier McGuinty some questions not only about the
Ontario economy as a whole but also with respect to the economy of
Northern Ontario. Here is a list of potential topics I would like
to see addressed.<br />
<br />
1. Good tax policy from a public finance
perspective makes much of the need to lower rates and broaden the base
when it comes to tax changes. While the onset of the new HST
certainly broadened the consumption tax base by subjecting a wider range
of goods to consumption taxation, the combined rate of a 5% GST and 8%
PST is still 13%. As currently imposed, the HST is therefore a
revenue enhancer. <i>Given the broadening of the consumption tax
base that occurred under the HST, would not a rate of say 10% or 11%
been more revenue neutral and more in keeping with good tax policy?</i><br />
<i>2. </i>Ontario’s net debt to GDP ratio
and the deficit has grown tremendously over the last five years.
Interest rates seem to be on their way up which threaten to raise the
cost of debt servicing in the medium term future. <i>Given that
economic recovery from the recession is now underway, what is the plan
to balance the budget and start paying down the debt to offset the
rising costs of future debt servicing due to rising interest rates? </i><br />
<i>3. </i><i>Could you please explain how
closing the two coal plants in Northwestern Ontario (while keeping the
Nanticoke plant in southern Ontario open) and then converting the
Atikokan plant to biomass (which essentially burns trees to produce
electricity) and the Thunder Bay plant to natural gas (which is also a
fossil fuel) can be both more environmentally friendly and a more
cost-effective way of generating electricity?</i><br />
<i>4. </i>The cost of electricity is an
important factor in Northern Ontario’s resource processing
industries. It is very likely that much of the projected
development in the Ring of Fire will be severely curtailed given the
continued high cost of electricity in Ontario relative to Manitoba and
Quebec. As a result, should mining development occur, the odds are
there will be very little value added processing within Ontario and the
development will be pure extraction. <i>What is the Ontario government planning to do to make Ontario electricity rates more competitive with other jurisdictions?</i><br />
<i>5. </i>There has been continual advocacy
in Northwestern Ontario for more autonomy within Ontario especially
over the control of natural resources, energy and transportation policy
via the form of a regional government and/or a regional power
authority. However, these requests have not been received
favorably by your government<i>. What are your reasons why Northwestern
Ontario should not be allowed to take on more responsibility for its
economic future via either regional government or a regional power
authority?</i><br />
<i>6. </i><i>We are still waiting for the release of the Northern Growth Plan. What is your best guess for a release date?</i><br />
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/documenting_the_rise_of_the_prov/">Documenting the Rise of the Provinces: Are They Richer Than They Think?</a></h2>
<ul class="post_info">
<li class="post_date">Feb 13, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/fiscal+federalism/">fiscal federalism</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/government+revenues/">government revenues</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/intergovernmental+affairs/">intergovernmental affairs</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/municipalities/">municipalities</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/">provinces</a></li>
</ul>
<div class="post_body">
Intergovernmental affairs and fiscal federalism have long been
interests of mine given that one of my fields in economics graduate
school at <a href="http://www.economics.mcmaster.ca/">McMaster University</a>
was public finance. One of the interesting aspects of combining a
field in economic history with one in public finance is that the long
view of data over time always yields insights that can be at odds with
popular debate. For example, put the provincial and territorial
leaders around a table at a federal-provincial conference and there will
inevitability be a discussion of underfunding and a need for the
federal government to come up with more cash. Yet, if one examines
the revenues available to provincial governments over time one cannot
help but notice that they have grown faster than both the federal and
local levels of government. I obtained data for federal,
provincial and local government revenues from the Fiscal Reference
Tables at the federal Department of Finance (See my previous post for a
link). From total federal revenues, I subtracted the amount the
federal government transfers to other levels of government so as to
leave the federal government with revenues available for its own
spending purposes net of transfers. Similarly, for the provincial
levels of government, while federal transfers remain part of their
revenues, I subtract the amount that the provinces and territories
transfer to their local governments. For the period 1961-2009, I
then take the ratio of these adjusted provincial revenues to local
government revenues and the ratio of the adjusted provincial revenues to
the adjusted federal revenues. The results as illustrated in the
accompanying figure show a long-term increase in provincial revenues
relative to both the local and federal levels of government. In
1961, for every dollar of revenue the municipalities took in, the
provinces and territories took in $1.20. By 2009, it was
$2.10. At the same time, whereas the provinces and territories in
1961 took in 62 cents for every dollar the federal government was taking
in, by 2009, this had risen to $1.76. Put another way, the
average annual nominal growth rate in government revenues over the
period 1961 to 2009 was 7.6 percent for the federal government, 8.3
percent for local governments and 9.8 percent for the
provincial-territorial governments. The provinces and their
creatures – the municipalities –have become the dominant fiscal tier
within the Canadian federation whether they believe it or not. It
would appear that for the most part, the provinces are richer than they
think.<br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZq268S642hUFXPC7JhwimA6yeussGp88jaOmdfOhDVtZH7fYFf6vjD6_c2wyfQE5QjfhWFlxWL2dFboPZR_DE7h1liDtnXx73XYNW9j7aFQuXsOQ1apI-3YP8GSnXDlVnhzTDuRvbewKv/s1600/a_007.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZq268S642hUFXPC7JhwimA6yeussGp88jaOmdfOhDVtZH7fYFf6vjD6_c2wyfQE5QjfhWFlxWL2dFboPZR_DE7h1liDtnXx73XYNW9j7aFQuXsOQ1apI-3YP8GSnXDlVnhzTDuRvbewKv/s320/a_007.jpg" width="320" /></a></div>
<br /></div>
</div>
<div class="post_container">
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/the_evolution_of_federal_transfe/">The Evolution of Federal Transfers to the Provinces and Territories</a></h2>
<ul class="post_info">
<li class="post_date">Feb 12, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/federal+government/">federal government</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/transfer+payments/">transfer payments</a></li>
</ul>
<div class="post_body">
The <a href="http://www.fin.gc.ca/pub/frt-trf/index-eng.asp">Fiscal Reference Tables</a>
of the Federal Department of Finance provide a wealth of information on
not only federal but also provincial government revenue and
expenditures. Of particular interest is the series on federal
transfer payments to the provincial and territorial governments.
These transfers currently consist mainly of Equalization, the Canada
Health Transfer, the Canada Social Transfer and the Territorial Funding
Accords. In the early 1960s, the sum of transfers was 642
million dollars whereas by 2009 they had grown to 56.990 billion
dollars. Whereas in 1961, federal transfers to other governments
represented 8.6 percent of total federal expenditures, by 2009 they
represented 20.8 percent (See Figure). Much of the growth occurred
with the expansion of health spending after the onset of Medicare in
1966. What this means is that over a fifty-year period, federal
transfers to the provinces have increased at a faster rate than other
categories of federal spending. However, there are three
distinct transfer spending phases within this pattern of overall
growth:(1) rapid expansion from 1961 to 1971, (2) decline from 1971 to
1997 and (3) recovery and expansion from 1997 to 2009. These
figures provide an interesting background to the coming debate over
federal-provincial transfers with the expiry of the Health Accord in
2014. This accord has expanded federal health transfers to the
provinces at about six percent per year and largely accounts for the
rise in the share of federal spending accounted for by transfers in
2004-05.<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrBQD_zjx0KqrhIbGl9qkqtk9bXR1cu6UADxumAwNDZNEvXVKhhHvZXu6O4UeW-7hGgA7FSeYedqLUeR2FexDMuZ7lWnN4cxqdGmLVxboB1PKPFD9O7GGv9vj5VEvy2bWtmzg207YKR5HL/s1600/a_005.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhrBQD_zjx0KqrhIbGl9qkqtk9bXR1cu6UADxumAwNDZNEvXVKhhHvZXu6O4UeW-7hGgA7FSeYedqLUeR2FexDMuZ7lWnN4cxqdGmLVxboB1PKPFD9O7GGv9vj5VEvy2bWtmzg207YKR5HL/s320/a_005.jpg" width="320" /></a></div>
<br /></div>
</div>
<h2 class="post_title">
<a href="http://ldimatte.shawwebspace.ca/blog/post/ranking_the_prominence_of_thunde/">Ranking the Prominence of Thunder Bay City Councilors</a></h2>
<ul class="post_info">
<li class="post_date">Feb 8, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/city+council/">city council</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/entertainment/">entertainment</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/rankings/">rankings</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/thunder+bay/">thunder bay</a></li>
</ul>
Economists like to rank things and after just a few months of our
new city council in Thunder Bay, it is interesting to rank the members
of our City council in terms of exactly how prominent they are in the
public eye. Technology is a wonderful thing and very useful these
days in generating very quick sets of statistics and numbers that can
lend themselves to simple rankings. What I have done is rank our
elected civic officials based on the number of hits they get in the
archives of the Thunder Bay Chronicle Journal Newspaper as well as the
Google search engine. For the Chronicle-Journal archive search, I
searched all of the archives using the councilors name in quotation
marks. For Google, I used the councilors name in quotation marks
followed by the term “Thunder Bay” so as to hopefully distinguish them
as much as possible from any potential namesakes in other
communities. Basically, the more hits, the more publically
prominent they are. For each source, I constructed a ranking
ranging from 1 to 100 and then averaged out the scores to get what I
term the “Prominence Index”.<br />
As the accompanying figure illustrates, there are definitely two
tiers of councilor when it comes to prominence – the big four: Ken
Boshcoff, Rebecca Johnson, Keith Hobbs and Iain Angus with scores
ranging from a high of 84.2 to 53.2. Then there is
everyone else ranging from Paul Pugh with a score of 13.7 to Joe
Virdiramo with a score of 31.3. Put another way, Ken Boshcoff
appears to be six times as prominent as either Paul Pugh or Andrew
Foulds but then his extensive hits reflect a much longer political
career than either of these two relative newcomers. Of
course, the interesting outlier is Mayor Keith Hobbs who though a
relative newcomer nevertheless ranks third in prominence largely because
of his top score in the Google search. It should also be noted
that there are no ward councilors in the top four.<br />
Just for fun, I also subjected myself to the same search procedure
and have included my score in the mix also with my index score relative
to the top councilor score. For example, for the CJ Archive score,
I come out at 15.3 (edging out Paul Pugh and Andrew Foulds) while my
Google score relative to the highest municipal politician at 100 was
actually 145.3 (topping Mayor Hobbs) for an average score of 80.3.<br />
Figure 1<br />
<div style="text-align: center;">
<br /></div>
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI4tKfMpMMEk_u8QO-24TGs3hyphenhyphenCapjXHlKNOAhX-MBE5_0nxu75_O1l4UrtbMLlERnto4dOd7w8Vo1eXl1pwSMSxAfQ9rAo4gn63pVNpe63glJvimXYe5L1nmPna4QkJ2KPJIZvIQqm6CQ/s1600/a_002.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI4tKfMpMMEk_u8QO-24TGs3hyphenhyphenCapjXHlKNOAhX-MBE5_0nxu75_O1l4UrtbMLlERnto4dOd7w8Vo1eXl1pwSMSxAfQ9rAo4gn63pVNpe63glJvimXYe5L1nmPna4QkJ2KPJIZvIQqm6CQ/s320/a_002.jpg" width="320" /></a></div>
<br />
<br />
What do these rankings mean? Perhaps nothing at all, other than
the ability to have your own web presence and insinuate yourself into
the local media. After all, marketing is everything. On the
other hand, if you are getting mentioned enough on the web and in the
local paper, perhaps it is because you are getting things done and are
involved in many accomplishments. Or perhaps it is because you
have become somewhat notorious. The searches for example
often illustrate hits for Thunder Bay councilors related to
controversial issues such as the location of windmills or tax and
budgetary issues. All in all, politics is about getting noticed
and these rankings suggest some politicians are able to get themselves
more noticed than others – whether the reasons are good or bad.<br />
<br />
<h2 class="post_title">
Government Drug Spending and Drug Stores</h2>
<ul class="post_info">
<li class="post_date">Feb 6, 2011</li>
<li>Posted By: Livio Di Matteo</li>
<li>Tags: <a href="http://ldimatte.shawwebspace.ca/blog/tag/canada/">canada</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/drug+expenditures/">drug expenditures</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/economics/">economics</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/health/">health</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/provinces/">provinces</a>, <a href="http://ldimatte.shawwebspace.ca/blog/tag/retail+outlets/">retail outlets</a></li>
</ul>
<div class="post_body">
The Globe and Mail had an interesting business story in Saturday’s paper on how Shoppers Drug Mart will be dealing with declining profits due to increased competition and also in part as a result to changes in
provincial government drug plans particularly in Ontario and Quebec.
All provinces have provincial government drug plans for individuals on
income assistance and those aged 65 and over. With rising costs,
provinces have been looking at ways to cut costs and Ontario and Quebec
are looking at reforms. Ontario has already banned professional
allowances –payments to pharmacies from generic drug companies – that
were costing the provincial government as much as 800 million dollars a
year.<br />
What was interesting about the Globe and Mail story was the graphic
on the number of Shoppers Drug Mart stores in each province. The
numbers are reproduced in Figure 1 below and show that Ontario had the
most stores at 611 while PEI had the fewest at 5. Of course, population
and market size is a factor in the number of stores so the number of
stores per 100,000 people might be a better indicator. This is provided
in Figure 2 and it turns out that the most stores adjusting for
population are actually in New Brunswick with 5.6 stores per 100,000
followed by Newfoundland and then Ontario. Quebec has the fewest
Shoppers Drug Marts at 2.2 per 100,000.<br />
<br />
<b>Figure 1</b><br />
<br />
<div style="text-align: center;">
<br /></div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPotzbIKS-F6F-BVM9l1q49ooZZukjOD2tyiSKO4pKzXm-bsmnBLl3mlo1nxBxiIZi0phodRGhem0wF0E_oglFoANzmxDw5qzvQLvzDwvzy9JM-_mX_CSF6S6kAzc517DY2aI0LT0iC8MJ/s1600/-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPotzbIKS-F6F-BVM9l1q49ooZZukjOD2tyiSKO4pKzXm-bsmnBLl3mlo1nxBxiIZi0phodRGhem0wF0E_oglFoANzmxDw5qzvQLvzDwvzy9JM-_mX_CSF6S6kAzc517DY2aI0LT0iC8MJ/s320/-1.jpg" width="320" /></a><br />
<div style="text-align: center;">
<br /></div>
<br />
<b>Figure 2</b><br />
<br />
<div style="text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDWAvNTprMWC2d9rywmKx2VhJUEn6paRlir5hGhfaJaeuOmqeVuCjiDDmoin7eyDc2JIrkyjjB42HRgHVfknMY9JkGgmEXd_PYTPZHJdsQHUz5aP6c8qP6vzA2Lf1OO-VDnu4KZOa4KFyl/s1600/-2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhDWAvNTprMWC2d9rywmKx2VhJUEn6paRlir5hGhfaJaeuOmqeVuCjiDDmoin7eyDc2JIrkyjjB42HRgHVfknMY9JkGgmEXd_PYTPZHJdsQHUz5aP6c8qP6vzA2Lf1OO-VDnu4KZOa4KFyl/s320/-2.jpg" width="320" /></a></div>
<br />
While a number of economic and business factors could influence the
number of stores, is there any evidence that more generous government
drug plans has helped fuel the expansion of Shoppers in certain
provinces? After all, as all economists know, if you want less of
something, you should tax it while if you want more of anything,
subsidize it. Figure 3 presents some simple evidence on nominal
provincial government drug spending per capita obtained from the Canadian Institute for Health Information to see if there is any relationship between the number of Shoppers Drug
Marts and the generosity of provincial drug spending. The results are
mixed.<br />
<br />
<b>Figure 3</b><br />
<br />
<div style="text-align: center;">
</div>
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC2YE-k8zw-pExy-4LlIjD2GEB32xTHCc9TkIiHP08BFpBfBG09CW5465uImSFADlyOFUjtMcNmuC6EpddAg2PmulK8_4XxoP3Voln3jIqBxdIJ43kqzw-40-ytHQ5_sau3sc9N1JWqOBF/s1600/-3.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhC2YE-k8zw-pExy-4LlIjD2GEB32xTHCc9TkIiHP08BFpBfBG09CW5465uImSFADlyOFUjtMcNmuC6EpddAg2PmulK8_4XxoP3Voln3jIqBxdIJ43kqzw-40-ytHQ5_sau3sc9N1JWqOBF/s320/-3.jpg" width="320" /></a><br />
The top five spenders per capita have an average of 3.79 stores per
100,000 population while the bottom 5 spenders have 3.76 – hardly a
major difference. Quebec and Ontario are the highest per capita
spenders on government drug plans but rank 10<sup>th</sup> and 3<sup>rd</sup>
respectively in the number of stores per 100,000 population. Manitoba
and BC spend the least on provincial government drug spending and rank 7<sup>th</sup> and 8<sup>th</sup>
respectively in terms of the number of stores per 100,000 population.
These rankings suggest that any positive relationship between the
generosity of provincial government drug spending and the number of
Shoppers Drug Marts is likely confounded by other factors such as urban
size and the minimum scale of store required as well as the amount of
competition from other chains and generics. For example, London Drugs
is a major competitor in Western Canada and three of the four western
provinces are in the bottom half in terms of number of stores per
100,000 population. All in all, fascinating stuff.</div>
Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-57105238839046004152016-12-13T20:29:00.004-08:002017-05-28T05:47:22.391-07:00January 2011 Posts12 Posts from January 2011<br />
<br />
<b>Northern Economist Presents to Queen’s Park Committee</b><br />
Jan 31, 2011 Posted By: Livio Di Matteo Tags: budget, economy, ontario<br />
<br />
I was invited to present to the Ontario Standing Committee on Finance and Economic Affairs as part of the pre-budget consultations and did so via video-conference on January 31st, 2011. Below is the text of my address. Please note that actual delivery may have varied from the prepared text. Slides used for the presentation are available on my university web page.<br />
<br />
<br />
<br />
Good morning Mr. Chair and Committee Members of the Ontario Standing Committee on Finance & Economic Affairs.<br />
<br />
My name is Livio Di Matteo and I am Professor of Economics at Lakehead University in Thunder Bay.<br />
<br />
Let me being with a quick summary. <br />
<br />
Ontario’s economy was severely hit by the recent recession particularly in its resource and manufacturing sectors. <br />
<br />
While the recession is ending and both employment and output are beginning to recover, we still need to address the long-term performance of the Ontario economy. Even without the impact of the recession, the fact is that Ontario has been performing poorly over the last decade when compared to many of the other provinces in the Canadian federation. Productivity and income growth has lagged.<br />
<br />
Fiscal sustainability is having the resources necessary to provide the public goods and services that as a province we have decided we need. When lagging productivity and income growth is combined with fiscal indicators that point to rising deficits and debt, the sustainability of Ontario’s public finances is called into question.<br />
<br />
Poor economic growth, low productivity and lagging per capita incomes will result in a decline in Ontario’s standard of living and ultimately also result in poorer public services.<br />
<br />
The basic economic indicators I wish to highlight are simple.<br />
<br />
First, as a basic output measure I will use real per capita GDP – the value of provincial output per person adjusted for inflation.<br />
<br />
Second, I will present evidence on employment – an indicator of economic activity as demonstrated by the number of jobs in the economy.<br />
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Third, I will present a simple productivity measure: real GDP per employed person.<br />
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The data sources are from Statistics Canada and the Government of Ontario<br />
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The first decade of the 21st century is a decade in which Ontario’s economy stood still.<br />
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While the overall output of Ontario’s economy has grown over the last 20 years, when you adjust that output for inflation and divide by population, provincial output per person has essentially stagnated since the start of the 21st century. While the drop since 2008 can be attributed to the severity of the recession, the fact remains that the period from 2000-2008 also saw little in the way of growth.<br />
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Notwithstanding the 2008-2010 recessionary period, if real per capita GDP (1997 dollars) from 2000 to 2007 had grown at the same average annual rate as it had from 1993-2000 (about 3 percent), then per capita GDP in 2008 would have been approximately 42,000 dollars or about 23 percent more than it actually was in 2008.<br />
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This represents foregone output from Ontario’s economy equal to about $7,000 per person.<br />
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Ontario’s economic performance is also poor in relative terms.<br />
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Ontario’s poor performance would be more tolerable if it was accompanied by other poor performances but Ontario’s real per capita GDP performance has stagnated while that of other provinces has continued to improve. <br />
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Ontario’s real per capita GDP has recently been surpassed by Saskatchewan, and Newfoundland and Labrador. While Ontario still has a higher GDP than many other provinces, they have continued to grow while Ontario has stagnated.<br />
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As a result, Ontario has begun to slip in the rankings of per capita output within the federation. In 1990, Ontario was second only to Alberta in its real per capita GDP while today it has slipped to fourth place. Since 2000, Ontario’s real per-capita GDP has gone from being 25% above the provincial average to being barely at the provincial average. <br />
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As Canada’s largest province and largest single provincial economy, the health of the Ontario economy has long been an important driver of prosperity for the Canadian economy. <br />
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Ontario has traditionally accounted for about 40 percent of the nation’s output and a similar share of its population. Ontario’s economy has traditionally been a diversified performer rooted in manufacturing, resources, and services and served as a powerhouse for the Canadian economy. <br />
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However, the powerhouse is waning and its performance become less electrifying.<br />
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During the course of the first decade of the 21st century, Ontario has seen its share of Canadian output decline steadily. <br />
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From about 42 percent of national output in the late 1990s, Ontario’s share has dropped to below 36 percent. <br />
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Over the period 2000-2010, Ontario has indeed been the worst provincial performer in terms of growth in real per capita GDP.<br />
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Over the first decade of the 21st century, eight out of 10 provinces experienced an increase in their real per-capita output, while only Ontario and New Brunswick saw declines.<br />
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Even Quebec, which has been the historical poor economic sibling to Ontario, saw its real per-capita GDP grow 6% during the decade.<br />
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Given this performance, it is perhaps no surprise that Ontario has come to qualify for equalization payments.<br />
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Employment is another indicator to consider.<br />
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Despite the poor per capita output performance, employment has continued to grow in Ontario and indeed since 1991, employment in Ontario has grown by 32 percent despite the recent losses from the recession. <br />
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However, when the employment growth is taken alongside the output stagnation, it means that more workers are producing less output per worker – a problem in productivity. <br />
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Labour productivity has declined.<br />
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Real GDP per employee rose from the early 1990s to 2000 but has since taken a steep drop. <br />
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Real output per worker from 2000 to 2010 fell from 71,000 to 65,000 dollars – a decline of about 8 percent.<br />
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This decline in productivity was also recently noted by Andrew Sharpe and Eric Thompson, of the Centre for the Study of Living Standards. They noted that while there has been a labour productivity slowdown in Canada since 2000, Ontario was the province that contributed disproportionately to the slowdown because of the concentration of manufacturing in the province and the fact that manufacturing was a major source of the low productivity.<br />
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Ontario was responsible for nearly two-thirds of the decline in Canadian labour productivity since 2000. Keep in mind that Ontario only accounts for about 36 percent of national output.<br />
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What does declining productivity and low growth really mean?<br />
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Productivity is important because cumulative slowdowns in the rate of economic growth result in the long term erosion of our standard of living. <br />
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For example, if your real per capita GDP is growing at 2% per annum, then you could expect your per capita income to double in about 36 years, At 4 percent, it would take about 18 years. At 10 percent, incomes would double in a mere 7 years.<br />
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While real per capita GDP in Ontario grew at just over 3% a year over the period 1995 to 2000, over the period 2000 to 2010, it shrank at an average rate of about 1/3 of one percent per year.<br />
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The long term implications of low or declining economic growth are stark. Low growth means that the tax base is also not growing which means that to increase or even maintain public spending you will require either higher tax rates or deficit financing.<br />
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Since 2000, government expenditure in Ontario has grown by 96 percent while government revenues have grown by 62 percent. The result has been a deficit in six of the ten years since 2000. <br />
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Fiscal sustainability is government having the resources to do what the public wants or needs. Growing deficits and debts mean that Ontario’s public finances have a sustainability problem which puts the vital public programs we all need at risk.<br />
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Ontario’s public finances over the long-term can be neatly summarized by an examination of revenues and expenditures and their difference –the deficit.<br />
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Since 2007, expenditures have rapidly outpaced revenues resulting in even larger deficits. Part of the recent deficit gap is the result of increased spending during the recessionary period, while part of it is also due to the slowdown in revenues because of the recession. <br />
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Nevertheless, longer term factors are also at work. Slower long-term economic growth is also a factor given that the ratio of provincial government revenue to GDP was 14.6 percent in 2001, reached 16.6 percent in 2007 (just before the onset of the recession) and in 2010 was at about 17.6 percent. Revenue has grown slower than expenditure but has grown faster than GDP meaning that the revenue burden on the economy has also grown. <br />
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Maintaining current levels of spending has required a rising revenue burden as well as large deficit. Large deficits in turn have accumulated into a growing debt.<br />
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When deficits and debt are combined with the power of compound interest over the long term, the results can be astounding.<br />
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Ontario’s net public debt was 1.6 billion dollars in 1965 and has risen to reach an estimated 245 billion in 2010. The debt is the sum of accumulated deficits plus interest. Given that Ontario’s net debt was 132 billion in the year 2000, it means that nearly half of Ontario’s net debt was acquired over the last 10 years. Indeed, while Ontario has been a province in the Canadian federation for 143 years, over 80 percent of its debt has been acquired in the 20 years since 1990.<br />
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A debt means interest costs to service the debt and debt service costs in Ontario have only been as manageable as they have been because of historically low interest rates – rates that will inevitably have to rise given inflationary pressures in the growing economies of India and China.<br />
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Of course, the ability to carry debt is also a function of your GDP and in Ontario, the debt to GDP ratio has also risen dramatically and now stands at nearly 40 percent. <br />
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By way of comparison, the Federal debt-to-GDP ratio has always been larger than Ontario’s. <br />
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However, as the federal government got its finances under control, its debt-to-GDP ratio began to drop dramatically while Ontario’s has continued to rise.<br />
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In 2010, Ontario’s debt-to-GDP ratio actually surpassed that of the Federal government for the first time in living memory.<br />
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The debt situation in Ontario has been compounded by a weak economic performance that was aggravated by the recession period from 2008-2010. Even with recovery from the recession, Ontario will also need to boost its productivity and growth rates to make sure that its debt-to-GDP ratio does not worsen.<br />
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Ontario is an economy facing many challenges. Ontario’s economy as evidenced from its output and productivity performance has been on a low growth trajectory with long-term implications for the province’s public finances and its public services. Rising deficits and debt have been tolerable up to this point because of a fiscal dividend afforded by the lowest interest rates in 40 years but should interest rates begin to climb – the combination of a large debt and the power of compound interest will be devastating.<br />
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The long-term implication of poor economic growth and productivity is a lower standard of living and reduced public services in health, education and other programs we hold dear.<br />
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Ontario must improve its economic growth record, its productivity performance and bring its public finances under better control. <br />
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Thank you.<br />
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<b>Canada, Ontario and Debt</b><br />
Jan 25, 2011 Posted By: Livio Di Matteo Tags: canada, debt, deficits, gdp, ontario<br />
The recent recession and fiscal crisis has ramped up government spending, deficits and of course sovereign debt around the world. Canada has been fortunate in that its federal deficit and debt has been relatively smaller than those of other countries such as the United States and the UK. Of course, Canada is a federation and along with federal debt there is also the debt of the provinces. An interesting comparison involves Ontario and the Federal government. Of course, one would expect the value of the Federal debt to be much larger than Ontario’s and indeed it is anticipated in 2011 that the Federal net debt will be about 594 billion dollars while that of Ontario will be about 245 billion dollars. However, when the net debt is compared to GDP to construct a debt-to-GDP ratio, what emerges is that for the first time in living memory, Ontario’s debt-to-GDP ratio has actually surpassed that of the Federal government. As the accompanying figure illustrates, the Federal debt-to-GDP ratio has always been larger than Ontario’s and the gap grew from the mid 1970s to the mid 1990s as federal finances became increasingly unsustainable. However, as the federal government got its finances under control, its debt-to-GDP ratio began to drop dramatically while Ontario’s has continued to rise. After a large jump in the early 1990s, Ontario’s debt-to-GDP ratio remained stable but since 2005 has taken another leap. In 2010, Ontario’s debt-to-GDP ratio actually surpassed that of the Federal government. The debt situation in Ontario has been compounded by a particularly weak economic performance that was aggravated by the recession period from 2008-2010. Even with recovery from the recession, Ontario will also need to boost its productivity to make sure that its debt-to-GDP ratio does not worsen.<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7P-GINYfYA-D44_VBM6MitIQfFk-9woao6OBdfj3uNxUTyi2gs6MFfOPZioD_qByLiIcma86e1EBL4t-0-1fIBJPF_lbWGT0ibI6NJEWubYmeniIdVYFC2M3m9UVd07buW5PywZ1pWKjG/s1600/preview_can-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7P-GINYfYA-D44_VBM6MitIQfFk-9woao6OBdfj3uNxUTyi2gs6MFfOPZioD_qByLiIcma86e1EBL4t-0-1fIBJPF_lbWGT0ibI6NJEWubYmeniIdVYFC2M3m9UVd07buW5PywZ1pWKjG/s320/preview_can-1.jpg" width="320" /></a><br />
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<b>Northern Economist on Television!</b><br />
Jan 23, 2011 Posted By: Livio Di Matteo Tags: economy, thunder bay<br />
Thunder Bay Television recently did a two-part series on Thunder Bay’s changing economy, which featured some of the interview I did with Reporter Dennis Ward discussing the growth of the knowledge economy and changing economic conditions in Thunder Bay. To see the two stories, click on the following links: Changing Economy Part 1 and Changing Economy Part 2.<br />
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Changes in Employment and EI<br />
Jan 23, 2011 Posted By: Livio Di Matteo Tags: canada, employment, employment insurance, ontario<br />
Statistics Canada recently released new data on the change in Employment Insurance Beneficiaries and the evidence suggests that recovery from the recession is indeed underway. In November, 673,700 people received regular Employment Insurance (EI) benefits, down by 5,700 (-0.8%) from October. The number of beneficiaries edged down in five provinces. The year-to-year decline numbers (November 2009 to December 2010) are also quite interesting and show the biggest percentage declines in Alberta and Ontario while Nova Scotia and PEI have actually seen increases (See Figure 1). <br />
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Figure 1<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiERSIMlm_6vzeSJF-lWjUqMxRPzwafoxZKWFu-q9GyHzAilKViEldv4z5R9AU6MKD3iwD4AnVBPk04B5M3dMfal9xNAZqucko8g98o3P-0A5KaFMDodufgA4qqjDsHVkNAiTHsr7eDyjbt/s1600/preview_slide1-2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiERSIMlm_6vzeSJF-lWjUqMxRPzwafoxZKWFu-q9GyHzAilKViEldv4z5R9AU6MKD3iwD4AnVBPk04B5M3dMfal9xNAZqucko8g98o3P-0A5KaFMDodufgA4qqjDsHVkNAiTHsr7eDyjbt/s320/preview_slide1-2.jpg" width="320" /></a><br />
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For Ontario in particular they show improvement in all centers with the biggest percentage drops in EI beneficiaries in Greater Sudbury, Kitchener-Cambridge-Waterloo and then Thunder Bay. (See Figure 2). <br />
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Figure 2<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizcsYqmVf-_9CnQ9NmNf8WTrL48VxL5DohkWjCqf2UAsr2giLS-CHJ2cTttnE9pp2yF9JWsWfUIoYl8OuzpXlcpITdfDPpVMHv5IelmnxUxuTYFMmNaTPRpOWzuk0E8jEXyGqTavunhiO6/s1600/preview_slide1-3.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizcsYqmVf-_9CnQ9NmNf8WTrL48VxL5DohkWjCqf2UAsr2giLS-CHJ2cTttnE9pp2yF9JWsWfUIoYl8OuzpXlcpITdfDPpVMHv5IelmnxUxuTYFMmNaTPRpOWzuk0E8jEXyGqTavunhiO6/s320/preview_slide1-3.jpg" width="320" /></a><br />
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Of course, the question is whether or not this represents an improvement in the economy and people moving off of EI and into new jobs or unemployed workers simply using up their benefits and falling off the EI rolls and still unemployed. The employment growth evidence for the period December 2009 to December 2010 suggests that at least some of the EI drop must be due to new jobs being created. Figure 3 shows that for Ontario CMAs, employment growth in percentage terms was greatest for Oshawa, Greater Sudbury and Toronto. <br />
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Figure 3<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNIUFe3t1dIRlJzYz2uh5mp0bobgGyLd8AdJZKsz3SGRPd_qgdEbG42Qsqu4cYvJe2Jb8dmG1XhOmU_aTzHh9pYeR9lkOvZe2v2TZtpolmoeSo3ipkCpXUm5qzJ6g7bSMhqZEVBaVwiJ2/s1600/preview_slide1-4.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNIUFe3t1dIRlJzYz2uh5mp0bobgGyLd8AdJZKsz3SGRPd_qgdEbG42Qsqu4cYvJe2Jb8dmG1XhOmU_aTzHh9pYeR9lkOvZe2v2TZtpolmoeSo3ipkCpXUm5qzJ6g7bSMhqZEVBaVwiJ2/s320/preview_slide1-4.jpg" width="320" /></a><br />
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Even Thunder Bay and Windsor registered increases of 2.2 and 0.5 percent respectively. However employment still declined in Hamilton, London and Kingston suggesting that full recovery from the recession still has a way to go in these cities. That employment growth is associated with large drops in EI beneficiaries is illustrated in Figure 4. <br />
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Figure 4<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeIqVcZNHy4GWv7se4qtDV8m6ABL4Ms4aXaLkM2zwteuRArYH8VW3xZg4CTlGuZ53ZSWMKvT_htlVE62DH8ws5M9ngHI2giMlaBTmsF7-1PJUp8AvePaugsVfhDTr1btUqY9ivy-kBrqaS/s1600/preview_slide1-5.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgeIqVcZNHy4GWv7se4qtDV8m6ABL4Ms4aXaLkM2zwteuRArYH8VW3xZg4CTlGuZ53ZSWMKvT_htlVE62DH8ws5M9ngHI2giMlaBTmsF7-1PJUp8AvePaugsVfhDTr1btUqY9ivy-kBrqaS/s320/preview_slide1-5.jpg" width="320" /></a><br />
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<b>Northern Economist in Saskatchewan!</b><br />
Jan 23, 2011 Posted By: Livio Di Matteo Tags: health care, johnson-shoyama public policy, sustainability<br />
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I just got back from a trip to Regina where I had the opportunity to present a talk at the Johnson-Shoyama Graduate School of Public Policy at the University of Regina. The seminar was also sponsored by the Western Regional Training Centre and beamed by video link to the University of Saskatchewan. My talk was on the afternoon of Friday January 21st and titled Health Expenditure Sustainability in Canada: Evidence from Expenditure Categories. While in Regina, I also got the chance to speak with Sheila Coles at CBC Saskatchewan's morning show. I have slides posted on my own university page and the slides as well as video will soon also be posted on the Johnson-Shoyama site.<br />
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My host for the visit was Dr. Greg Marchildon, Canada Research Chair in Economic History and Policy, Johnson-Shoyama Graduate School of Public Poilcy, at the University of Regina. The Johnson-Shoyama Graduate School of Public Policy is a provincial centre for advanced research and education, outreach and training activities with campuses at both the University of Regina and the University of Saskatchewan. The school provides students and faculty the opportunity to work on contemporary public policy and administration challenges in an academic environment renowned for innovation and is fast becoming a destination for students from across the country and around the world.<br />
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<b>Northern Policy Advice for Ontario’s Next Premier</b><br />
Jan 17, 2011 Posted By: Livio Di Matteo Tags: economic policy, northern ontario, ontario election<br />
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As Ontario heads towards its fall 2011 election, there will inevitably be discussion of what new policies can help drive Northern Ontario’s economy in the 21st century. Historically, economic development in Ontario’s North was a partnership between private sector resource exploitation and a public sector economic strategy to make the north an investment frontier for the south as well as a source of government revenue via the exploitation of natural resources.<br />
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Nineteenth century Ontario implemented a northern development scheme that could be termed a “Northern Ontario Policy” that operated parallel to the Federal government’s National Policy. Ontario’s Northern Policy provided a regional program of northern land grants to promote agricultural settlement and the building of the Temiskaming and Northern Ontario Railway and colonization roads to foster access. As well, there was the passage of the “Manufacturing Condition” which required that timber cut on crown land be processed within the province so as to retain value added as well as provide government revenue.<br />
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At its peak, the province of Ontario obtained nearly one quarter of its revenue from northern resources and used it to fund expanding provincial services. Indeed, in the early part of this century, Ontario’s northern forests and mines were akin to Alberta’s oil today. However, the process of resource revenue maximization was also a factor in biasing our economic development away from a more diversified and innovative economy. <br />
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The last decade has seen government policies that have deliberately raised the cost of energy in the North and have sequestered large chunks of its territory from future development in the name of protecting the environment. In the wake of the forest sector crisis, the McGuinty government has sponsored numerous consultations but we are of course still waiting for the release of the Northern Growth Plan. Judging from the preliminary documents and discussion to date, there likely will not be anything truly innovative in the Northern Growth Plan aside from new ways of uttering bland platitudes aimed at providing palliative economic care. Indeed, truly innovative proposals have generally been ignored not only by the provincial government but also by Northern political leaders whose main preoccupation is serving the needs of Queen’s Park first and their constituents second. <br />
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Here again are some policy suggestions for a growing North that will create economic activity and ultimately foster economic independence and prosperity. First, Ontario and the Federal government together should set as their ambitious goal the four-laning of the Trans-Canada highway through all of northern Ontario by 2020. Such an ambitious infrastructure project will generate substantial economic activity and the improved transport corridor will generate long-term commerce and trade throughout the North. Such a corridor will also complete the vital east-west zone of highway transit for the Canadian federation. Second, the province should explore the creation of northern tax incentive and trade zones to spur economic activity and attract investment. These incentive zones are especially crucial in border areas immediately adjacent to the United States such as Sault Ste. Marie, Thunder Bay and Kenora. <br />
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Third, the provincial government should allow the North to operate its own regional electric power grid through a regional power authority. The North is blessed with thousands of megawatts of potential hydroelectric power that is cost-effective, sustainable and not a contributor to greenhouse gases. A regional power authority could become a valuable tool for northern development and provide the cheap electricity for value-added processing and development necessary for mining in the Ring of Fire. <br />
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Finally, the province should foster institutional change and bring about the creation of regional government in the north to foster regional planning and direction in the areas of energy, environment, transportation, economic development and resource management. Indeed, the creation of new hydroelectric corridors in the North should fall under the auspices of a regional government. Moreover, the regional authority would also open up access to crown lands for cottage and recreational development. To date, crown lands have been administered as if they are as scarce as in the more populated South. Indeed, an entire sea of regulations designed in Southern Ontario to administer a heavily urbanized region has been broadly applied to the North as a set of one size fits all policies. <br />
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These are not new ideas but it is time to bring them up again as we move into an election year as they are unlikely to be brought up by Ontario's current governing party. If Northern Ontario is to prosper and provide opportunities for its children, Northern Ontarians must advocate more strongly than ever before. The North is a resource abundant region with a skilled labour force but it requires the institutional tools to affect its development and chart its economic course. Ontario’s next premier should think differently and unleash the potential of the North by giving it the tools its needs to help itself.<br />
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<b>An International Perspective on Public Health Care Sustainability</b><br />
Jan 17, 2011 Posted By: Livio Di Matteo Tags: health spending, international, public spending, sustainability<br />
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The sustainability of Canada’s public health care system is a constant policy issue and the evidence presented usually shows public health spending growing faster than revenues, national income and other government spending. The specter is often raised that health will come to occupy ever-larger shares of provincial government health spending and crowd out other spending such as education and social welfare. <br />
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It is interesting to examine the growth of public health care spending in Canada from the perspective of international comparisons. The World Health Organization (WHO) provides some interesting data sets on international health care spending in 2006 that facilitate comparisons. Two figures from that data are presented below. The figures are for nominal per capita government health spending in U.S. dollars and therefore are not adjusted for inflation or purchasing power parity. It should be cautioned that some of the differences might partly reflect exchange rate differences. Nonetheless, the results are interesting.<br />
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Figure 1 ranks the top 40 spenders from lowest to highest in 2006 and reveals that in per capita U.S. dollars, Canada in 2006 was the 16th highest spender in the world at 2,754 U.S. dollars per capita – between Belgium and Germany. First was Luxembourg which spends 5,991 dollars while Norway, Monaco and Norway were the next highest. The United States of America actually spends more per capita on government health care (its Medicare and Medicaid Plans) than does Canada – a fact that many Canadians are unaware of. This figure also leaves off more than another 100 countries that spend below the top 40. Indeed, some countries at the very bottom of the international rankings only spend a few dollars per year on health care period. They are generally places you probably do not want to get sick in.<br />
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Figure 2 ranks the top 40 spenders in 2006 by the percent growth in per capita government health spending over the period 1995 to 2006. The biggest increase is for Qatar at 415 percent followed by Korea and Ireland. Canada, at an increase of 112 percent over the 11-year period is in the middle of the top 40-pack, between Australia and Greece. Japan, Israel and Germany are at the bottom of the spending list.<br />
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Needless to say, Canadian health care sustainability is a relative issue when examined internationally. While increases in public health care spending in Canada are an important and serious issue, we are not alone in facing it. We probably have much to learn from those that spend both more and less than we do.<br />
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Figure 1<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjED7gmaHTXESssuQ2Em0NBHMm8P2yh4EiJK6-oVgnkqeIOa25Uf6fNs1Fge_Y_8VSnhFsQUlI012_T1nYUo_ukg1Cv3H5zrd-hdF2n3wRN69trXf62PXg_BEq51NJUFzXmwKwDhaU4ZAjh/s1600/preview_figure_1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjED7gmaHTXESssuQ2Em0NBHMm8P2yh4EiJK6-oVgnkqeIOa25Uf6fNs1Fge_Y_8VSnhFsQUlI012_T1nYUo_ukg1Cv3H5zrd-hdF2n3wRN69trXf62PXg_BEq51NJUFzXmwKwDhaU4ZAjh/s320/preview_figure_1.jpg" width="320" /></a><br />
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Figure 2<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7n_6jK9gyJBjLk4HjKsvFDYuVIFVGSoIpRAE9ALGVEF1p4E3psqoy1fCkNbNNMNdcq98Sms5HsnMRNe16Mn6mfiDydm0IP2k_T9XVDoVoi3bzfANcZsfiy_uJhA0L3FdE_vi__12uP0qh/s1600/preview_figure_2.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7n_6jK9gyJBjLk4HjKsvFDYuVIFVGSoIpRAE9ALGVEF1p4E3psqoy1fCkNbNNMNdcq98Sms5HsnMRNe16Mn6mfiDydm0IP2k_T9XVDoVoi3bzfANcZsfiy_uJhA0L3FdE_vi__12uP0qh/s320/preview_figure_2.jpg" width="320" /></a><br />
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<b>So I Guess It Was Not A "Great Depression"</b><br />
Jan 13, 2011 Posted By: Livio Di Matteo Tags: canada, economy, ontario, recession<br />
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Statistics Canada has officially weighed in on what many of us have of course suspected all along - that the Great Recession of 2008-09 was not only not Depression-like but also was not as bad as previous recessions. Those of us who recall our economic history know that the Great Depression saw unemployment rates in Canada in the vicinity of 20 percent while some Canadian provinces saw their output drop by one-third. Unemployment rates during the 1981-82 recession reached about 13 percent in Canada. As for the 2008-09 "Great Recession", the unemployment rate in Canada did not break 10 percent (though it did in places like Windsor) and aside from the Ontario manufacturing impact did not seem as traumatic as past recessions.<br />
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According to Statistics Canada's study Comparing the 2008-2010 Recession and Recovery With Previous Cycles , while output contracted in the early stages at a faster rate than the previous two recessions, by most conventional measures (real GDP, hours worked and employment) the 2008-09 recession was less severe than the 1981-82 and 1990-92 recessions. The most striking feature of the "Great Recession" was the severity with which the export sector was hit and this helps explain part of what hit Ontario industry which had a monoculture of forestry in the North and auto production in the South. Ontario's economy is very closely tied to the U.S. economy and the severity of the downturn there hit Ontario exports quite hard. Household demand and by extension consumer spending also appears to have suffered less during this downturn and this demand in a sense helped compensate for the export sector drop. I think that low interest rates and high debt loads households took on was probably a major factor stabilizing consumer demand during this last recession in Canada.<br />
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See below for some graphs on Canada's recession experience from Statistics Canada:<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVYPmsxanY7s99E_aU3QRYgvpjVLZ8HG_AYeRbX_44Enpvco3CvLEuBsPqNmr4S6L1mzyPRy1CkVoPQCs814Yjtauie-KltSy2UJTwDL_M0cvYuypy-2LHOvPHs7Yu4t15KIPqFZz0EouS/s1600/preview_c110113c.gif" imageanchor="1"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjVYPmsxanY7s99E_aU3QRYgvpjVLZ8HG_AYeRbX_44Enpvco3CvLEuBsPqNmr4S6L1mzyPRy1CkVoPQCs814Yjtauie-KltSy2UJTwDL_M0cvYuypy-2LHOvPHs7Yu4t15KIPqFZz0EouS/s320/preview_c110113c.gif" width="295" /></a><br />
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<b>Reality Check: What is Thunder Bay's GDP Growth Rate?</b><br />
Jan 11, 2011 Posted By: Livio Di Matteo Tags: economy gdp, thunder bay<br />
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According to a story in this morning’s Chronicle Journal (Better Strategy Urged, Chronicle-Journal, January 11, 2011, A3) it was reported that: “While Ontario cities have seen an average increase of nine percent in their GDP, Thunder Bay has only been growing at about one percent…” This is generally a positive sounding story because it stresses that while we are not growing as fast as other Ontario cities, we are still growing. It would of course be interesting to know what the context for these numbers is and how they were calculated. For example, is it real or nominal GDP? Is it for the last year? Is it an average for the last decade? We’ll never know because of course the report the numbers are coming from will not be made public as the report according to the city manager is considered “an internal document”. On the one hand the City of Thunder Bay wants an open process to engage citizens in its new strategic planning process and on the other hand it likes to keep its data part of an internal process. Fortunately, there are other sources of data. According to the Conference Board of Canada’s Metropolitan Outlook 2 Summer 2010 edition, Economic Insights Into 27 Canadian Metropolitan Economies, Thunder Bay has experienced negative real GDP growth over the last three years (See Figure below). In 2007, real GDP growth was -0.3 percent, in 2008 it was -2.0 percent and in 2009 it was further reduced to -4.9 percent (See Figure). How those numbers in any way might average out to one percent positive growth is something I certainly would like to see. It would appear that nothing much has changed in Thunder Bay city politics when it comes to objective research and data and open public discussion. <br />
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Figure 1<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyTU-Y71vYd1gpFmpm-b1LKtTSWfT2xLyIzjxYm9VfZ_0q-hL2U9JuiYefjntT44Zcdrw8ez8BAP4Zy4AY6ftQC4NhW2nGgTTjFp6qF3SX7jTx4BC7bupLdKrzpQHcO988HHsdcxnqw7Pv/s1600/preview_slide1-1.jpg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhyTU-Y71vYd1gpFmpm-b1LKtTSWfT2xLyIzjxYm9VfZ_0q-hL2U9JuiYefjntT44Zcdrw8ez8BAP4Zy4AY6ftQC4NhW2nGgTTjFp6qF3SX7jTx4BC7bupLdKrzpQHcO988HHsdcxnqw7Pv/s320/preview_slide1-1.jpg" width="320" /></a><br />
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<b>Changing Employment Picture in Thunder Bay</b><br />
Jan 6, 2011 Posted By: Livio Di Matteo Tags: economy, employment, thunder bay<br />
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As I was preparing for my health economics class lecture this week, I came across a table I was using to illustrate the importance of the health care sector in a local economy. The table showed the top 10 employers in Thunder Bay in May 2003. I decided it was time for an update given that 2003 was the start of the regional forest sector crisis and a time of immense change and transition for the Thunder Bay economy. What changes have occurred between 2003 and 2010?<br />
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The top employer in 2003 (See Table 1 below) was Thunder Bay Regional Hospital (now the TBRHSC) with 2,000 employees. The top 10 employers accounted for 14,610 employees out of a total employment at the time of 65,700 – about 22 percent of total employment. In 2010, the top employer (See Table 2 below) was still the hospital sector with the Thunder Bay Regional Health Sciences Centre (TBRHSC) now reporting 2,500 employees – an increase of 25 percent from 2003. Next is Lakehead University, which is reported to have 2,250 employees, an increase of 51 percent since 2003. After that is the Lakehead District School Board which reports 2,100 employees or an increase of 17 percent since 2003. Still in fourth place is the City of Thunder Bay with 1,855 employees – an increase in employment of six percent. Total employment by the top 10 in 2010 is 15,715 out of a total employment of 60,300 representing 26 percent of employment.<br />
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These numbers are really quite fascinating for a number of reasons. First, total employment in Thunder Bay is down from 65,700 to 60,300 representing a decline of 5,400 jobs or about 8 percent of employment since 2003. This no doubt is the impact of the forest sector crisis and associated spillovers. If you look at the top 10 in 2003, both Bowater and Buchanan Group are among the top 10 employers with 1,603 and 1,262 employees respectively. In 2010, both Abitibi-Bowater and the Buchanan Group have dropped off the top 10 list and according to the Thunder Bay Community Economic Development employer list now only account for 500 and 610 employees respectively - a combined drop in employment of 61 percent since 2003. Indeed, according to this list, in Thunder Bay, Abitibi-Bowater now employs as many people as does MacDonald's Restaurants.<br />
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Second, while overall employment in Thunder Bay has dropped, the number of jobs accounted for by the top 10 has actually gone up by about eight percent. Jobs in Thunder Bay have been both created and destroyed since 2003 but overall more have been destroyed than created. Where are these new jobs? Well, generally in the broader public sector. Employment has increased substantially in the health and education sectors. The increases in school board employment are particularly interesting given the widespread view that enrollment is declining and there are no jobs for new teachers. The increase in Lakehead University’s employment numbers over this period by 51 percent are also interesting given that according to the university’s institutional statistics, the number of full-time faculty has grown by 22 percent - from 259 to 315. <br />
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This can all be positively interpreted as growth in the knowledge economy but at the same time there is a disturbing absence of private sector involvement. Whereas in 2003, 4 of the top 10 employers were in the private sector, by 2010, only one remained – Bombardier - and that company is also heavily reliant on the public sector for transportation purchases. A growing dependence on public sector employment at a time when governments have moved into deficit territory should raise some warning flags for local leaders and policy makers.<br />
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TABLE 1: Major Thunder Bay Employers May 2003<br />
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SOURCE: CITY OF THUNDER BAY, TOURISM AND ECONOMIC DEVELOPMENT<br />
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1. THUNDER BAY REGIONAL HOSPITAL <br />
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2,000<br />
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2. GOVERNMENT OF ONTARIO <br />
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1,853<br />
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3. LAKEHEAD DISTRICT SCHOOL BOARD <br />
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1,800<br />
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4. CITY OF THUNDER BAY <br />
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1,750*<br />
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5. BOWATER <br />
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1,603<br />
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6. LAKEHEAD UNIVERSITY <br />
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1,492<br />
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7. BUCHANAN GROUP <br />
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1,262<br />
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8. THUNDER BAY CATHOLIC DISTRICT SCHOOL BOARD <br />
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1,250<br />
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9. BOMBARDIER <br />
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850<br />
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10. RMH INTERNATIONAL TELESERVICES <br />
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750 <br />
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TOTAL FOR TOP 10 <br />
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14,610<br />
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TOTAL THUNDER BAY EMPLOYMENT (May 2003) <br />
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65,700<br />
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*In 2003, the FTE number of City of Thunder Bay employees was 1,749.7 but what was originally reported was the total number of employees, which was 3,080. This actually placed the City of Thunder Bay 1st in 2003. This has been adjusted to make the City of Thunder Bay numbers consistent with what they have reported as their employment in 2010 which appear to be the FTE numbers. <br />
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TABLE 2: Major Thunder Bay Employers June 2010<br />
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SOURCE: THUNDER BAY COMMUNITY ECONOMIC DEVELOPMENT CORPORATION<br />
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1. THUNDER BAY REGIONAL HEALTH SCIENCES CENTRE <br />
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2,500<br />
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2. LAKEHEAD UNIVERSITY <br />
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2,250<br />
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3. LAKEHEAD DISTRICT SCHOOL BOARD <br />
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2,100<br />
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4. CITY OF THUNDER BAY <br />
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1,855<br />
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5. GOVERNMENT OF ONTARIO <br />
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1,849<br />
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6. ST. JOSEPH’S CARE GROUP <br />
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1,700<br />
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7. THUNDER BAY CATHOLIC DISTRICT SCHOOL BOARD <br />
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1,521<br />
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8. GOVERNMENT OF CANADA <br />
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653<br />
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9. BOMBARDIER TRANSPORTATION <br />
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650<br />
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10. CONFEDERATION COLLEGE <br />
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637<br />
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TOTAL FOR TOP TEN <br />
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15,715<br />
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TOTAL THUNDER BAY EMPLOYMENT (June 2010) <br />
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60,300 <br />
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<b>Manitoba should consider an HST</b><br />
Jan 4, 2011 Posted By: Livio Di Matteo Tags: economy, manitoba<br />
by Livio Di Matteo<br />
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This originally appeared in the Winnipeg Free Press print edition January 4, 2011 A10<br />
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Manitoba has a reputation as a diversified and steady long-term economic performer. Indeed, in 2009, Manitoba alone among Canada's provincial economies did not contract.<br />
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According to the Conference Board, real GDP growth in Manitoba for 2011 will be 2.3 per cent placing it fifth highest amongst Canada's provinces.<br />
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This strong performance is evidenced by still robust housing investment and provincial unemployment rates that are below the national average. Even recent population growth has been strong by historic standards as the result of in-migration. With a strong agricultural sector and growing world demand for food, Manitoba seems well placed for future prosperity.<br />
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Yet there is the nagging feeling that all is not right and Manitoba demonstrates some economic weaknesses.<br />
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Though a part of Western Canada, Manitoba's economy has not grown as fast as Saskatchewan's or Alberta's and its projected GDP growth in 2011 and 2012 will also trail those provinces. If one compares Manitoba to its southern prairie neighbor, North Dakota, it is also Manitoba that has the higher unemployment rates and the lower real GDP growth. Manitoba's economic performance only looks stellar when it's compared with Atlantic Canada or northwestern Ontario.<br />
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Of course, Alberta and Saskatchewan are fuelled by the equivalent of economic steroids -- natural resource rents from oil, gas and potash. But Manitoba also has natural resources -- agricultural land and, more importantly, abundant hydroelectric resources.<br />
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Yet Manitoba seems to have not benefited as much from its natural resource base, given that electric power sales overall have declined in the last five years.<br />
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As for Manitoba's diversified and stable economy, the fact is that its celebrated manufacturing sector has also been slowly declining as a share of the province's economy over the last decade. The high value of the Canadian dollar and the impact of the recession in the United States, which takes about two-thirds of Manitoba's exports, have both played a role in manufacturing decline.<br />
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Another indicator worth noting is that Manitoba still gets one third of its provincial government revenues from federal transfer payments,much of that from equalization.<br />
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Equalization accounted for $2 billion last year, making up about half of all transfer revenue and about 17 per cent of total revenue. Given that equalization is paid to provinces with below average fiscal capacity, it means that Manitoba -- despite its diversified economy and "robust" growth, is still relatively weak economically.<br />
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As an equalization recipient, Manitoba is definitely a part of the East rather than the West as P.E.I., New Brunswick, Nova Scotia, Quebec and Ontario are the other recipients.<br />
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Aside from current strategies of investing in education and pursuing business tax relief, what else can Manitoba do to boost its long-term economic growth rate and competitiveness?<br />
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First, while its export markets are more diversified than other Canadian provinces, Manitoba needs to broaden its markets even more. Export opportunities in rapidly growing China, India and Brazil need to be explored more aggressively.<br />
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A benefit from the recent surge in international migration to Manitoba will be a host of instant trade ambassadors and contacts with other countries. The biggest sources of Manitoba's recent international immigrants -- Philippines, Germany, China and India -- are also where future export and import business opportunities lie.<br />
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Second, because of its beneficial effects for exporters, it may be time to revisit the controversial HST issue. Harmonizing the retail tax system with the GST can provide a competitive boost for industry and business by allowing them to claim taxes paid along the supply chain as credits against their tax liabilities.<br />
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Moreover, the HST reduces the administrative costs of complying with two tax systems. While this does entail a shift of the sales tax burden from business to consumers, the burden on lower income groups can be mitigated by a more generous provincial tax credit.<br />
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The benefits of the HST on the export sector and the economy are long-term, but in politics timing is everything.<br />
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Ontario implementing the HST at the height of an economic downturn was not terribly prudent. It was a calculated risk motivated by the looming fixed provincial election date in 2011. Burying the transitional impacts of the HST alongside the recession would hopefully allow it to reap the long-term economic benefits in time for the election while leaving consumer anger in the past. The wisdom of this strategy remains to be seen.<br />
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With the recession ending, Manitoba is fortunate to have the flexibility to reconsider implementing the HST during a time of economic recovery.<br />
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Livio Di Matteo is professor of economics at Lakehead University in Thunder Bay, Ontario.<br />
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<b>Airports, Taxis & Monopoly</b><br />
Jan 2, 2011 Posted By: Livio Di Matteo Tags: airport, taxi service, thunder bay<br />
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Well, I’ve just returned from a holiday trip away and like other years again found myself at Thunder Bay International Airport late at night in a cold line-up with numerous other people all waiting for a cab. Despite the abundance of passengers, it took a while for lone cabs to arrive and my wait was about 15 minutes. Given that the Air Canada flight I was on had just discharged at least 120 passengers and a West Jet flight arrived minutes later from Punta Cana, one would have expected to be greeted by a line-up of taxis eager to take your business. After all, with modern communications technology, cab companies must know the airline schedules and should be able to assign capacity to meet expected demand. <br />
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Moreover, it’s not as if it’s not worthwhile to provide the service as the price is not exactly cheap. Like all firms with market power, taxi companies in Thunder Bay charge some pretty steep fees compared to other cities both inside and outside Ontario. Indeed, in Ontario, Thunder Bay and Sault Ste. Marie generally have some of the highest cab fees. I live near Lakehead University and it is basically a 30-dollar ride to the airport. A similar distance in Winnipeg can be had for 15-20 dollars while in Toronto, 108 dollars can actually get you from Pearson to downtown Hamilton while about 50 dollars gets you to Oakville.<br />
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Taxi service can be considered a partial monopoly by virtue of government franchise as the Police Services Board regulates entry into the industry as well as the fee structure. Like many other cities, taxis in Thunder Bay face regulations regarding airport service that limit the amount of competition allowed. While all companies can drop off, one company has a monopoly on airport pickups and others are allowed to pick up only if a cab from the dominant provider is not there to provide the service. In essence, one company has a degree of monopoly power over airport pick-up service. I guess I don’t have a problem per se with monopoly though I would prefer more competition and lower prices. We all have to make a living and if you can get yourself a monopoly or some kind of market power that can boost your price or income well then bully for you.<br />
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What is odd about the Thunder Bay Airport taxi situation is that the company with the exclusive rights does not seem able to meet demand. By not having enough cabs at periods of peak demand, it is actually foregoing revenue while at the same time preventing entry by virtue of its government franchise. The point of having a monopoly is being able to generate monopoly profits! In the case of Thunder Bay’s airport taxi service, one cannot help but hypothesize that a reason for the high fees is simply to maintain a target income flow while reducing operating costs and service. If business drops because of the poor service, simply petition for an increase in rates to make up for the business drop. The only beneficiaries from this type of oddball business practice are probably the airport parking authority and the car rental companies. More competition and lower prices in the airport taxi business would probably force them to lower their fees too. <br />
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Apparently, the Police Services Board in Thunder Bay has hired a consultant to study taxi bylaws and fees. (Taxi bylaws to come under review) One would hope that a result of this review would at least be a move to greater taxi capacity at the airport during periods of peak demand. After all, the first impression on visitors and business people arriving in Thunder Bay for the first time and trying to get somewhere is not great. High prices and fast, efficient service is acceptable but high prices with slow, inefficient service is definitely bush league.<br />
<br />Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-58831980395544423922016-12-13T20:18:00.004-08:002017-05-28T05:46:54.377-07:00December 2010 Posts<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifa7ig-KL-9fmNQrIWgKJYj_-AVx_Izv3n5-VuwrfUxBKJaHPWx4ie2nu3OkmSFykMvzrknmmzYQLeyLjJPx2vjNdnuQcY7KDay-nHLIMk0QQztfeJyOxCQaxVIap3iNdBrsJSO_e01dGQ/s1600/a_002.jpeg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifa7ig-KL-9fmNQrIWgKJYj_-AVx_Izv3n5-VuwrfUxBKJaHPWx4ie2nu3OkmSFykMvzrknmmzYQLeyLjJPx2vjNdnuQcY7KDay-nHLIMk0QQztfeJyOxCQaxVIap3iNdBrsJSO_e01dGQ/s320/a_002.jpeg" width="320" /></a>7 Posts from December 2010<br />
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<b>Season's Greetings from Northern Economist</b><br />
Dec 22, 2010 Posted By: Livio Di Matteo Tags: christmas, economics<br />
Economics may be considered the dismal science but it can also provide fascinating insights during the season of joy. There are a number of interesting sites on the web linking Christmas and economics in a number of surprising ways. One of my favorites is the London School of Economics Choir's performance of Handel's Hallelujah Chorus. For the more literary minded, there are a number of discussions on Charles Dicken's A Christmas Carol as a comment on Victorian markets and economics. For a positive and uplifting discussion on how Scrooge responded to incentives, visit MV=PQ: A Resource for Economics Educators. For a discussion defending Scrooge's miserliness as a positive virtue, read Steve Landsberg's opinion piece In Praise of Misers. You might also find the actions of the Grinch Who Stole Christmas likened to a Pigovian Tax designed to correct an externality an amusing read in Art Carden's How Economics Saved Christmas. Finally, for those of you who are more materially minded, there is always the economic impact of Christmas. The U.S. Census Bureau has a number of numbers and facts on the holiday season (in 2004) in its Facts for Features section. These include the number of Christmas cards sent - 1.9 billion - and the value of retail sales by U.S. department stores in December - 31.9 billion dollars. I hope you find some of these links useful as you celebrate Christmas and the holiday season. Remember, economic analysis is the gift that keeps on giving. All the best for a Merry Christmas and Happy New Year from Northern Economist.<br />
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<b>When Will They Bury Us?</b><br />
Dec 20, 2010 Posted By: Livio Di Matteo Tags: china, economy, growth comparisons, india, north america, per capita gdp<br />
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Another View of Economic Growth Statistics<br />
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The robust economic growth of India and China combined with the sovereign debt crisis and the aftermath of the recent financial crisis and Great Recession has inevitably sparked fears that Western economies are about to be surpassed. However, recent economic growth needs to be placed in some statistical perspective. There is an International Macroeconomic Data set on the web for the period 1969-2010 put together by Dr. Mathew Shane at the United States Department of Agriculture Economic Research Service that calculates per capita GDP in inflation-adjusted U.S. dollars for regions and countries of the world. While this data is not adjusted for purchasing power parity to reflect cost differences, it nonetheless can be used to provide some interesting comparisons.<br />
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Figure 1 takes the year 1969 as the base year for each of the world’s major economic regions and then constructs an index for each region. What this does is show the growth of real per capita GDP. For example, based on a value in 1969 of 100, by 2010, North America’s real per capita index value is 203, which means that per capita output has doubled over the 40-year period. North America is outperformed by both Europe and Asia. From a starting value of 100 in 1969, Europe in 2010 reaches an index value of 214 while Asia reaches a value of 315. South America is also a fairly robust performer reaching an index value of 198 in 2010. The former Soviet Union, the Middle East, and the Carribean and Central American regions are definitely in the bottom half of performers. The poorest performer is Africa, which between 1969 and 2010 sees the index for real per capita output rise from 100 to 127 – a 27 percent increase in real per capita output over 40 years.<br />
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Figure 1<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOwWEChEsaT01Mc7u7ozW5ks1TRtvgf_BKGa2j8laqMMhhBuSU47Ly39CiKHIZxQdab52hE3zhRIMGlSeAfY4tApEFdxw3HsSO2qRmRaQk0-mPzzJ9dwg_8Wa6FsSPkzLthAUxKY0E1I4m/s1600/a.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOwWEChEsaT01Mc7u7ozW5ks1TRtvgf_BKGa2j8laqMMhhBuSU47Ly39CiKHIZxQdab52hE3zhRIMGlSeAfY4tApEFdxw3HsSO2qRmRaQk0-mPzzJ9dwg_8Wa6FsSPkzLthAUxKY0E1I4m/s320/a.jpeg" width="320" /></a><br />
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The results in Figure 1 are certainly in keeping with the recent views of the Asia-Pacific region as the place to watch. For Canadians, whose export sector has been dominated by the United States, the rapid income growth of China and India provides substantial opportunities for future export growth given the slow recovery of the U.S. economy, as does the European market. Canada’s international trade patterns are not set in stone and can change. In 1920, about 80 percent of Canada’s exports went to the UK whereas today about 80 percent goes to the United States. In another 100 years, it is not inconceivable that 80 percent of our trade could be with the economies of China and India.<br />
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However, we should not be so quick to write off our current trade partner. While our per capita income growth and that of the United States has paled in comparison to the Asia-Pacific region, the fact remains that the levels of per capita income in much of the world are still substantially below that of North America. For example, in 1969, the real per capita GDP of North America in 2005 U.S. dollars was $20,770 compared to $12,799 in Europe, $1,117 in Asia and Oceania and $944 in Africa. By 2010, real per capita GDP in North America had only doubled but was now $42,099 while real per capita GDP in the Asia-Pacific area which had tripled was still only $3,514 dollars – still a fraction of North American output. <br />
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This can be presented visually in another graph, which takes North American real per capita output in 1969 as the base value for all regions of the world. In Figure 2, both growth in per capita income as well as the levels of income can be compared and they show a somewhat different picture. As robust as the growth rates of per capita income are in other parts of the world relative to North America, North American output is still by far much higher. Over the period 1969 to 2010, real per capita output in North America grew at 1.7 percent annually while that of the Asia-Oceania region grew at 2.8 percent. If those growth rates are maintained, the real per capita income of Asia-Oceania will surpass that of North America somewhere around the year 2200. Of course, given the population differences and the growth rate difference, the total size of the Asia-Oceanic economy will surpass North America and Europe combined much sooner than that, but it is output per person that is the more decisive welfare measure. Moreover, over the course of decades, growth rates will not necessarily stay constant and changes in policies, technology shocks and a myriad of other unforeseen effects can also be expected to affect growth. <br />
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Figure 2<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5KuvJOzmaO8v9jhyphenhyphen8TVKwrNhy8CY8SWuvJ1aIgltD2FDtIMp5-y_DGYiGTb1gYKkaO77T6l0qt6738KwRSekQGexmw1gQ6RH6N9px9yP-0eo0s4blxzcw_VYN7kpk-kbtbG4ykyJR4vgt/s1600/a_002.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5KuvJOzmaO8v9jhyphenhyphen8TVKwrNhy8CY8SWuvJ1aIgltD2FDtIMp5-y_DGYiGTb1gYKkaO77T6l0qt6738KwRSekQGexmw1gQ6RH6N9px9yP-0eo0s4blxzcw_VYN7kpk-kbtbG4ykyJR4vgt/s320/a_002.jpeg" width="320" /></a><br />
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<b>Police Numbers and Crime</b><br />
Dec 17, 2010 Posted By: Livio Di Matteo Tags: crime, policing, statistics<br />
Statistics Canada has just released its annual compilation of numbers for police personnel and expenditures (Police Resources in Canada, 2010) and reports that in 2010 there were 69,300 police officers in Canada, about a 3 percent increase from the year before. Police strength as measured by the rate of police officers per capita increased two percent to an average of 203 officers for every 100,000 population. As always, the numbers when examined by region and census metropolitan area show some interesting features which are enhanced this year by the inclusion of a Crime Severity Index alongside the police numbers. According to Statistics Canada, the police-reported Crime Severity Index measures changes in the severity of crime from year to year. Each type of offence is assigned a weight derived from actual sentences handed down by courts. <br />
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These numbers allow for a ranking of thirty-three Canadian Census Metropolitan areas by the numbers of police officers per capita, the severity of crime (a larger index means more crime) as well as a comparison of whether areas with more crime have more police officers. In other words, is the number of police officers per capita being demand driven?<br />
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In terms of police officers per 100,000 population, the numbers for 2010 range from a low of 107 for Kelowna to a high of 202 in Saint John (See Figure 1). At 190 officers per capita, Thunder Bay ranks third highest (just after Regina) while the other northern Ontario metropolis – Greater Sudbury – ranks 19th at 155 officers per capita. <br />
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Figure 1<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW3ySqbvHb4Ehd_DX3qTEG8PhXUGY2Fa969NOdeHtXM5qUpZ5y77ek0H0MxY1qznfEk4sKcdI3vR_GMqLVVsgj3_zlG25xwHzMdRIXOyJ0kE9AVOfhsZWyF1pvrIUTlY1cPgE7LEkudayW/s1600/a_004.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW3ySqbvHb4Ehd_DX3qTEG8PhXUGY2Fa969NOdeHtXM5qUpZ5y77ek0H0MxY1qznfEk4sKcdI3vR_GMqLVVsgj3_zlG25xwHzMdRIXOyJ0kE9AVOfhsZWyF1pvrIUTlY1cPgE7LEkudayW/s320/a_004.jpeg" width="320" /></a><br />
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In terms of the Crime Severity Index, the lowest value is for Guelph at a score of 59 while the highest is for Regina at a value of 144 (See Figure 2). The Thunder Bay CMA ranks 7th highest with a Crime Severity Index value of 110, while Greater Sudbury ranks 16th with a score of 81. It would appear that the proverbial Sudbury Saturday night is probably much tamer than in Thunder Bay. <br />
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Figure 2<br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgS0w2lac_0lKpKgiVpryeWNL2XTDI3hi89cwhZDfOfQ_AMW_p7z5Fzt4zOdsDNkn31-Eikox1v0gDanjYQUlZ2WGRKzIecuH8hOqXNp0nbiYXkI3UtSC5lZuJEbPm6CaXp8tU-4y1plmX6/s1600/a_006.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgS0w2lac_0lKpKgiVpryeWNL2XTDI3hi89cwhZDfOfQ_AMW_p7z5Fzt4zOdsDNkn31-Eikox1v0gDanjYQUlZ2WGRKzIecuH8hOqXNp0nbiYXkI3UtSC5lZuJEbPm6CaXp8tU-4y1plmX6/s320/a_006.jpeg" width="320" /></a><br />
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Do CMAs with more crime have more police officers? The answer seems to be yes. The top ten cities in terms of Crime Severity have an average of 173 police officers per capita while those in the bottom 10 have an average of 153 officers per capita – a fairly substantial difference. Moreover, there is a pretty strong correlation - a positive linear trend - between crime severity and police officers per capita that suggests for every one point increase in crime severity, the number of officers per capita go up by about 0.39. (See Figure 3).<br />
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Figure 3<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrWf8qLuFznQxAYFYUWaem5-doPiNINtWKtWJiESTn6_FhC1SsetOhFnJKjGOX4E7-XTexTyWB-vbT7Xx3Gfp4y1tCXfjsRyPxF2lthbjwfpHm15OV2JaFtWgfjNDNjbCfaCsUGpE5x5Ln/s1600/a_003.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjrWf8qLuFznQxAYFYUWaem5-doPiNINtWKtWJiESTn6_FhC1SsetOhFnJKjGOX4E7-XTexTyWB-vbT7Xx3Gfp4y1tCXfjsRyPxF2lthbjwfpHm15OV2JaFtWgfjNDNjbCfaCsUGpE5x5Ln/s320/a_003.jpeg" width="320" /></a><br />
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However, this relationship omits other factors that may be influencing the number of police officers per capita. For example, do cities with larger populations and more compact areas – that is, higher population densities - generate economies of scale in policing that lower costs and the number of officers per capita? Or, could there also be supply side factors at work? Does having more police officers mean that more crime is reported and apprehended thus resulting in higher crime severity statistics? What about the types of crimes being reported as well as the age distribution of population given that younger populations are generally associated with more crime. A more thorough analysis would need to control for population density and age distribution as well as other socio-economic factors such as income before more specific conclusions could be drawn.<br />
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<b>Ontario's Employment Performance</b><br />
Dec 12, 2010 Posted By: Livio Di Matteo Tags: economy, employment, ontario<br />
The Regional Dimensions of Employment Growth in Ontario<br />
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Ontario’s economy has been in a rough patch given the recent recession and the associated job losses but overall Ontario’s economy over the last decade has nevertheless created about 890 thousand jobs – an increase in employment over the period 1999 to 2009 of nearly 16 percent. The period from 1999 to 2003 saw an increase of just over 10 percent while 2003 to 2009 saw an increase of just over 5 percent. However, as information from the Ontario government’s recent fall economic and fiscal statement reveals, this overall growth masks some interesting regional variations in performance. When one ranks Ontario’s employment growth across its eleven economic regions, as shown in the accompanying chart, one finds a definite set of winners and losers. The worst performers have been the Northwest region and the Stratford-Bruce Peninsula which saw employment declines over the period of -9.1 and -0.7 percent respectively. The Windsor-Sarnia and Northeastern regions are the next worst managing to eke out positive but anemic growth rates of 0.7 and 0.8 percent. The London area saw an increase of 6 percent in its employment level while Kingston-Pembroke witnessed a 6.6 percent increase. Muskoka-Kawartha comes next at 11.5 percent and then the Hamilton-Niagara Peninsula region at 13 percent. The Kitchener-Waterloo-Barrie region is the third best employment growth performer in the province at an 18.9 percent increase and then Ottawa at 19.7 percent. The winner? The GTA saw its employment grow by 22.4 percent and presently accounts for 47 percent of Ontario’s employment. Indeed, the top three regional employment performers together account for nearly 70 percent of jobs in Ontario. <br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwQw9qPFBQRagpqaGZRkttdILh34g84p8RHkbq6_3bcmb1uzBdTJcggLMfLE8CDx5laECHfndcoypa81pS6fwl8ghrAyfu8qA76TIVMK4zF1H-HCOTP1MBUjBgt9InIVcV4qomjKzloHC6/s1600/a_005.jpeg" imageanchor="1"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjwQw9qPFBQRagpqaGZRkttdILh34g84p8RHkbq6_3bcmb1uzBdTJcggLMfLE8CDx5laECHfndcoypa81pS6fwl8ghrAyfu8qA76TIVMK4zF1H-HCOTP1MBUjBgt9InIVcV4qomjKzloHC6/s320/a_005.jpeg" width="320" /></a><br />
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When one looks at the variations in regional performance, it would appear that the closer you are to the Ottawa and Toronto urban areas, the better your employment performance has been over the last decade. The opportunities present in the larger and denser urban agglomerations appear to have large spillover benefits to geographically adjacent regions. This would appear to fly against the conventional wisdom that in the new economy it does not matter where you are as long as you can plug into the information highway. These numbers suggest that geography and proximity may still matter a lot.<br />
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<b>THE 176 MILLION DOLLAR QUESTION</b><br />
Dec 6, 2010 Posted By: Livio Di Matteo Tags: compensation, first nations, land settlement, resource rents<br />
What Should Fort William First Nation Do With 176 Million Dollars?<br />
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The news that long-standing land claims relating to Fort William First Nation dating back to the 1850s are about to be resolved with an offer to settle the boundary claim from the Federal and Provincial governments is an important economic development. The proposal includes about 154 million dollars in financial compensation to be paid to the Fort William First Nation, along with the transfer to Canada of provincial Crown lands on two islands in Lake Superior — Flatland Island and Pie Island — to be set apart as a reserve. In addition, there is another 22 million dollar settlement with the Federal government – the Neebing claim – involving the sale of farmland in the mid-nineteenth century. All together, this entails financial compensation of 176 million dollars as well as the transfer of a substantial amount of land. The question is how can these new resources best be used for the benefit of Fort William First Nation (FWFN)?<br />
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No doubt there will be many proposals and suggestions for investments in infrastructure, community services and business proposals. For what its worth, here is a suggestion rooted in international experience with windfall oil profits. This financial compensation represents a lump sum financial transfer not much different from a chunk of royalties from natural resource rents. After all, this money is compensation for land – the natural resource base of Fort William First Nation. Quite a few jurisdictions around the worlds have established oil and resource funds that have invested these government revenues. These funds are designed to save a large share of energy wealth to create a permanent wealth increase that generates the income to sustain future government expenditures to plan for the day when the nonrenewable resource runs dry. Countries with such funds include the United Arab Emirates and Norway while Alberta in Canada has its own Heritage Fund.<br />
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My advice to FWFN would be to set up a trust for the 176 million dollars and invest it in good quality secure bonds and other fixed income securities and set up an investment board to spend only the income from the fund on economic development and infrastructure projects. In addition, not all of the income should be spent - a percentage should be ploughed back into the trust so that it can grow over time. In essence, you would be creating a permanent endowment that would provide economic security, funds for social investment and resources for economic development for FWFN in perpetuity. Even at 4 percent a year, such a fund could yield 7-8 million dollars a year for social investment, business development and infrastructure projects - an amount that is probably substantially more than the current resource envelope available for such matters. <br />
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Such a solution may not seem as exciting as spending the money on immediate projects or as entrepreneurial as setting up dynamic new businesses but it is probably a sounder and less risky stewardship approach. Given the plethora of competing proposals and information that will undoubtedly inundate FWFN, creating a trust at least for the short term would provide an opportunity to get the best possible advice and evaluate proposals with an eye towards the long term. Taking 5-10 years to develop a longer-term development and investment strategy while earnings millions of dollars a year that can be spent or invested would be a wise approach. It took well over a century to get the money. What not take a few more years to decide what to do with it?<br />
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<b>Canadian Health Care Spending</b><br />
Dec 2, 2010 Posted By: Livio Di Matteo Tags: canada, health spending, medicare, sustainability<br />
Winnipeg Free Press - PRINT EDITION<br />
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All over map on medicare<br />
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By: Livio Di Matteo<br />
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Republished from the Winnipeg Free Press print edition December 2, 2010 A13<br />
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Total health-care spending in Canada between 1975 and 2010 rose from $12 to $192 billion and as a share of GDP went from seven to nearly 12 per cent.<br />
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More crucial is that the proportion of provincial government budgets devoted to health care rose dramatically, fuelling fears that health spending will overwhelm provincial budgets.<br />
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Whereas in 1975, the average provincial government's program spending budget devoted 26 per cent to health, today it is nearly 40 per cent.<br />
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To date, most public discussion of sustainability neglects the complexity of public health spending across expenditure categories and provinces.<br />
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First, the sustainability issue has no simple answer or resolution. Whether public health spending is sustainable or not depends on what health expenditure category you are discussing and in which province.<br />
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Second, spending more on health care per se does not mean there is a sustainability issue if, as a society, we have decided that is what we want to do. This means that there needs to be a debate over whether or not we want more public health-care spending and how we want to spend it.<br />
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Since 1975, the adjusted average annual growth rate for inflation has outstripped per capita GDP growth, provincial revenue growth and federal transfer growth.<br />
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Yet, when broken down by health expenditure categories, it turns out that growth in inflation, adjusted in terms of per-capita provincial government spending on hospitals and physicians, has matched GDP and provincial revenue growth. Other categories such as drugs, other institutions, capital and the all other health expenditure category (e.g. home care) have been growing at much faster rates.<br />
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Put another way, provincial government health spending on hospital and physician services -- the core of public medicare -- is quite sustainable. It is the expansion of provincial government spending in these other categories that is not.<br />
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Growth rates in per-capita provincial government health expenditures vary by province and expenditure category and over time have generated some substantial differences in spending across provinces.<br />
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Some provinces are spending considerably less per person than others. In 2010, per-capita provincial government health spending ranged from a high of $4,678 in Newfoundland to a low of $3,359 in Quebec with Manitoba third-highest at $4,216.<br />
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For hospitals, the highest is Newfoundland at $2,211 per person and the lowest Quebec at $1,265 with Manitoba fourth-highest at $1,749. For physicians, Ontario spends the most at $867 per person while British Columbia spends the least at $568 per person and Manitoba fourth at $768.<br />
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For drugs, the biggest spender per person is Quebec at $350, with British Columbia at $205 and Manitoba the next lowest at $236.<br />
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Why does Newfoundland spend 39 per cent per person more on health in general and 75 per cent more on hospitals than Quebec? Why does Ontario spend 68 per cent more per person on drugs and 53 per cent more on physicians than British Columbia? Why does Prince Edward Island spend $184 per person on administration for provincial government health spending while Saskatchewan is able to spend only $26 dollars -- 86 per cent less?<br />
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If there is a "public" health-care system, why is there such a divergence in per capita provincial government spending and why does the divergence appear to be growing, particularly in categories such as public health and all other health, drugs and hospitals?<br />
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If, as our constitution implies, being a Canadian citizen entitles you to reasonably comparable levels of public services at reasonably comparable levels of taxation, how do we account for these differences in health spending based on where one lives?<br />
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While there are demographic and environmental factors across the provinces that can account for some of these differences, it is obvious that the provinces also have some very different approaches to their health-care systems when it comes to providing and managing health care.<br />
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To say the entire public health system is unsustainable is clearly inaccurate, given that hospital and physician services -- about 56 per cent of provincial government health spending -- are sustainable by any reasonable definition and are more sustainable in some provinces than others.<br />
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Given the expansion of public health spending in areas outside the traditional core and the sustainability issues generated, we need to have an explicit debate regarding whether or not this is what we want.<br />
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Finally, before embarking on another traditional Canadian health-care reform debate and the inevitable provincial clamour for more federal funding, we need to have a serious discussion as to why some governments are able to spend substantially less on health than others and what we can learn from that.<br />
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Livio Di Matteo is a professor of economics at Lakehead University, Thunder Bay.<br />
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<b>New Regional Graduate Retention Report Out</b><br />
Dec 2, 2010 Posted By: Livio Di Matteo Tags: economy, graduate retention, northern ontario<br />
GRADUATE RETENTION AND THE ECONOMY OF NORTHWESTERN ONTARIO<br />
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By Livio Di Matteo, Report Prepared for the North Superior Workforce Planning Board 2010<br />
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For a Full copy of this report, please visit the North Superior Workforce Planning Board at: http://www.nswpb.ca/. See the YouTube Video of the release.<br />
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Executive Summary<br />
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Knowing what we can do to foster post-secondary graduate retention and recruitment by determining the factors influencing decisions to stay within the region versus leaving after graduation is important for the economic future of Northwestern Ontario. The retention of graduates and their knowledge is crucial to fostering knowledge creation and knowledge economy jobs. The empirical evidence suggests that while there has been an increase in the output of post-secondary graduates in Thunder Bay and Northwestern Ontario, the labour force still has lower shares of these graduates than Ontario as a whole. This implies that there has not been as much retention of post-secondary graduates relative to the rest of Ontario.<br />
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The issue of graduate retention is complex as there are both demand and supply side factors involved. There is an absence of detailed information on the specific amount of graduate retention in the region as well as the way graduates and employers make their decisions. While the availability of jobs is a factor in the choice of graduates to remain within a region, the number of graduates produced by the region is also a factor. However, while employment availability is a necessary condition, it is not enough as attitudes of graduates, availability of information about opportunities, and owner-manager perceptions of graduates and their education are also factors. Indeed, along with the attitudes of recent graduates towards the region and its opportunities, there is also the attitude and perception of employers towards what they believe graduates can do for them. As well, experience in other parts of Canada suggests that incentive programs are invariably part of the picture when it comes to graduate retention. As part of a long-term effort to develop a graduate retention strategy, a number of recommendations are made. First, that alumni surveys currently in place at the region’s post-secondary institutions be further developed and expanded in order to obtain additional information on career paths and regional graduate retention. Second, in order to facilitate longer term tracking of graduates, a longitudinal graduate tracking database should be established for the region’s graduates. Third, surveys of employers need to be expanded in order to better determine their needs with respect to graduates from all post-secondary programs in the region. Fourth, given the rapid growth in First Nations population and its importance as a source of future graduates, attention should be given to additional data collection on First Nations graduate supply and career paths as well as strategies to boost post-secondary education in this demographic group. Fifth, the establishment of regional graduate retention incentive programs akin to those that have been established in other parts of Canada should be explored. Finally, given that there are some specific employment needs, effort in sector-specific graduate recruitment programs should be continued. Moreover, consideration should also be given to increasing the regional supply of graduates in any fields deemed deficient given the rapidly changing nature of the economy.<br />
<br />Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.comtag:blogger.com,1999:blog-4725295102574902352.post-80583653230609068812016-12-13T20:10:00.003-08:002017-05-28T05:46:33.637-07:00November 2010 Posts2 Posts from November 2010<br />
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The Resilient Northwest<br />
Nov 30, 2010 Posted By: Livio Di Matteo Tags: northwestern ontario, ontario economy<br />
December 1st, 2010<br />
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By Livio Di Matteo<br />
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According to the Stockholm Resilience Center (www.stockholmresilience.org), the concept of resilience refers to the capacity of a social-ecological system to withstand perturbations from various types of shock and to then renew itself afterwards. In other words, if a system is resilient, it can deal with change. The forest crisis in Northwestern Ontario was a major economic shock to the region’s economy that resulted in massive employment losses and yet if one looks at the region’s economy and especially its major center – Thunder Bay – one cannot help but notice the resilience of the economy. Thunder Bay, which has seen three of its four pulp mills close and numerous sawmill job losses over the period 2003-2009, has witnessed increases in many indicators of economic activity suggesting that the economy has been able to adapt to the shock of the forest sector loss.<br />
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The relatively resilient economy in Northwest Ontario is being driven by three broad forces: the continued transition towards a knowledge based economy in the region, the expenditure on public sector infrastructure and the growth and development of the mining sector in the region. The knowledge economy in Northwestern Ontario is being spearheaded by the development of the Thunder Bay Regional Health Sciences Centre (TBRHSC), the Northwestern Ontario School of Medicine (NOSM) and the research work of the Thunder Bay Regional Research Institute (TBRRI). The TBRHSC employs 2,500 people and has an annual budget of 280 million dollars. In addition, the TBRRI is recruiting scientists from around the world to conduct work in the areas of molecular medicine and imaging systems and new medical research associated private sector companies are being spawned such as Sentinel and Tornado. The other key blocks of the regional knowledge sector economy include Lakehead University with a total employment (full & part-time) of 2,000 and an annual operating budget of approximately 100 million dollars and Confederation College with 760 employees (full and part-time) and an annual operating budget of almost 70 million dollars. In addition, the region’s manufacturers such as Bomdardier and GRK fasteners also use knowledge intensive and skilled workers and have also seen growth in their activity. Bombardier in particular is assured a future in urban transit given the increasing demand for such systems in an urbanizing world.<br />
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With respect to public sector infrastructure, the Northwest region has recently seen millions of dollars in provincial road construction and improvements as part of a planned 273 million dollar investment in regional highways. There are 32 projects in Northwestern Ontario nearing completion involving 494 kilometres of highway and nine bridges, which have created 1,900 construction related jobs. In the Thunder Bay region, there is a waterfront development project underway as well as substantial recent investments in roads and bridges, a new library and trail development.<br />
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Finally, there is activity in the regional mining sector as well as the projected developments in the Ring of Fire. Ontario’s north is still a vast storehouse of forest and mineral wealth and continued growth in the economies of China, India and Brazil will eventually generate an upturn in resource prices which will spark a boom in resource commodities. In the James Bay Lowlands, in Ontario’s so called “Ring of Fire’, there are over 100 mining companies with holdings. Mining in Northwestern Ontario currently directly employs nearly 2,000 people with a payroll of 142 million dollars annually. In general, the combined economic benefits of a single “representative mine” as documented by University of Toronto economists Peter Dungan and Steve Murphy are large. In its opening phase, a new mine generates almost 2,000 jobs annually to Ontario and adds approximately 280 million dollars to GDP and approximately 65 percent of the jobs are local or in the region where the mine is located. Once the mine is producing, about 1,500 jobs are created annually in the local region. In light of this analysis, the long-term potential of the Ring of Fire is enormous given its potential supplies of nickel, copper, zinc, gold, chromite and palladium. <br />
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Is all this having an effect? While employment levels in Thunder Bay and region are still below their 2003 peak, other indicators suggest a rebounding and resilient economy. For example, building permits in Thunder Bay over the period 1995 to 2010 have exhibited an upward linear trend. Moreover, the total value of building permits in 2010 to date represents an increase of 44 percent over 2009. Housing prices in Thunder Bay are also very healthy and have been on a pronounced upward trend despite the debut of the forest sector crisis. Since 2003, the average MLS average housing price in Thunder Bay has risen from $111,927 to $153,800 in 2010 – an increase of 37 percent. Another indicator is the passenger volume of the Thunder Bay International Airport, which is the regional airport and therefore services all of Northwestern Ontario. Passenger volumes have increased dramatically. Since 1998, passenger volumes have increased by 30 percent and indicate that despite the forest sector downturn there is still growing demand for air travel to and from the region.<br />
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Despite its dependence on the forest sector for nearly 20 percent of its employment, it would appear that the economic shock of the last decade in northwestern Ontario has been absorbed and adjusted to and that some positive economic change has resulted especially in the Thunder Bay region. This does not mean the Northwest is out of the woods yet – there is still a provincial government energy policy that has resulted in high electricity prices and a Far North Act that impinges on future development. Nevertheless, recent performance is much better than one would have expected.<br />
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Livio Di Matteo is Professor of Economics at Lakehead University.<br />
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Laggard Ontario<br />
Nov 30, 2010 Posted By: Livio Di Matteo Tags: ontario economy<br />
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By Livio Di Matteo<br />
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Originally published in The Financial Post, November 17, 2010<br />
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The Ontario government will be tabling its fall economic statement in the legislature on Thursday. Premier<br />
Dalton McGuinty, who has been seemingly unaware of the impact of his energy and economic policies on<br />
the province’s economy, would do well to take heed from the danger signs provided by another update —<br />
the recent Statistics Canada update to provincial GDP numbers.<br />
The new StatsCan numbers show that, as a result of the recession, real gross domestic product in 2009 fell<br />
in every province except Manitoba. Moreover, the declines were steepest in Newfoundland and Labrador,<br />
Saskatchewan, Alberta and Ontario.<br />
Being in the company of so many poor performers will not be a suitable defence for Ontario’s economic<br />
record for two main reasons. First, while Ontario’s decline was smaller than that in Newfoundland, Alberta<br />
and Saskatchewan, those provinces can blame their drop primarily on the fall in natural resource<br />
commodity prices, namely oil. Ontario’s key natural resource sector — forestry — while hit hard over the<br />
last decade, is not as important a sector to Ontario as oil and gas is in these other provinces. The economy<br />
will grow in Newfoundland, Alberta and Saskatchewan as oil and gas prices recover.<br />
Second, Ontario’s dismal performance caps a decade of dismal performance. Ontario has become a laggard<br />
in per capita GDP, as highlighted when it entered the ranks of the “have-not” provinces and began to<br />
collect equalization. A survey of statistics for the last two decades shows that Ontario’s share of total<br />
provincial GDP has declined from 42% in 1990 to 37% in 2010. More ominous, the bulk of that decline has<br />
occurred since 2000 — largely coinciding with McGuinty’s decade of political power. Whereas in 1990,<br />
productive Ontario’s share of national output exceeded its population share, we now are witnessing the<br />
sorry spectacle of the reverse.<br />
When Ontario’s economic productivity performance is examined in terms of real per-capita GDP, it<br />
emerges that Ontario’s output has stagnated for an entire decade. Between 2000 and 2010, real per-capita<br />
GDP in Ontario actually declined by 8%. While one may wish to ascribe this to the impact of the recession<br />
and the global financial crisis since 2008, the fact remains that Ontario’s performance was the worst of all<br />
10 provinces.<br />
Indeed, over the first decade of the 21st century, eight out of 10 provinces experienced an increase in their<br />
real per-capita output, while only Ontario and New Brunswick saw declines. Even Quebec, which has been<br />
the historical poor economic sibling to Ontario, saw its real per-capita GDP grow 6% during the decade.<br />
Since 2000, Ontario’s real per-capita GDP has gone from being 25% above the provincial average to being<br />
barely at the provincial average. From having the second-highest real per-capita GDP in the country<br />
(second only to oil-rich Alberta), it is now the fourth highest. No wonder Ontario is now receiving<br />
equalization payments.<br />
Ontario’s economy appears to be adrift, with its government oblivious to the real state of its economy and<br />
seemingly unable to get a grip on economic and fiscal policy. While global economic circumstances have<br />
played a part in Ontario’s predicament, Ontario’s regulatory and interventionist government policy culture<br />
has not helped much.<br />
Witness the initiatives of recent years: the messianic closing of cost-effective coal plants and implementing<br />
of higher-cost wind and solar energy initiatives in the name of the environment, raising minimum wages,<br />
implementing and then rescinding eco-taxes, timing the arrival of the HST with a recession, sequestering<br />
large land areas of the province’s north from economic development. Rather than the economy, priorities<br />
that have consumed the government’s energy include banning pit bulls and pesticides, as well as both<br />
smoking and cellphones in vehicles (but then actually considering cellphone use in schools) and debating<br />
the merits of mixed martial arts fighting.<br />
In the midst of all the economic carnage, the Ontario government is presiding over a massive hike in<br />
electricity costs — an energy source that used to be the foundation of Ontario’s economic advantage. Add<br />
to this the fiscal deficit and a net debt that is expected to reach $240-billion by 2011, and one has an<br />
economy that is on the verge of being unable to deliver the standard of living that its citizens have come to<br />
expect.<br />
That Ontario’s future economic welfare is in a clear and present danger is a sad understatement.<br />
<br />
<br />Livio Di Matteohttp://www.blogger.com/profile/00571298455081925580noreply@blogger.com