Top 10 of 2013 – Thunder Bay

10. Construction started on the marina condo’s and hotel. Construction got underway in February which helped to calm the rumours that they would never happen. This was a portion of the private sectors 65 million dollar contribution to this project. Construction is well underway and building 1 should be completed in August 2014.

9. Murder rate drops – Thunder bay murder rate will drop in 2013 from 7 the previous year to 2. This should help us to lose the title of murder capital of Canada and reduce our standings in the violent crime rankings.

8. Enhanced Infrastructure Renewal Plan starts to show progress – Raising the infrastructure budget by the 1.5% helped to reduce the infrastructure deficit plaguing the city. If the next council continues the program the city will be spending the proper amount of money on infrastructure by 2017.

7. Habib plants a seed – Habib brought forward his ideas for what the downtown south core should look like. It was met with praise from city administration and city council who were in attendance. If his plan proceeds as he envisions then the downtown south core will change by 2015-2016.

6. City Hall Sounds – a new program to bring music and food vendors together to give those in the south core a little different atmosphere. It was so well received that it will be returning next year and should likely see some expansion. This is just one project in a growing number in the cultural portfolio that is helping to make our city more welcoming to citizens and others.

5. Power Generation stays online – While it wasn’t the preferred option of the Northwest Energy Task force it was still a win. The conversation to natural gas was cancelled in 2011 for a plan which seemed to be in favor of closing the site. After a long fight it was deemed that the plant would be converted to biomass and continue to run for the next 5 years. This saved millions to city coffers and keep 100 jobs in the city.

4. Housing boom continues – While it was a little slower this year (due to long and cold winter) there was another huge boom in the number of houses being built in the city. In October there was 168 single detached homes built and 130 multi-unit residences built. This construction is in anticipation of the good economic news that is slowly coming to the region with the Ring of Fire, healthcare, construction and more.

3. Noront completes the Environmental assessment – This means that the company is taking another step forward in developing the Ring of Fire. While Cliffs walked away from the table for the time being this and other companies have continued to push forward. Its first mine could be in operation by 2016 if everything goes according to plan. Thousands of jobs for people in Northwestern Ontario are around the corner if these companies can get their shovels in the ground.

2. 210 million dollars in permits issues – These numbers have been consistent the last 3 years showing the strength of the construction economy in Thunder Bay recently. Project after project seems to be going up and they seem to be increasing in size after each project. This bodes well for both Thunder Bays economy and its tax situation.

1. Future outlook (Yes, I know its cliche) Thunder Bay has a positive outlook for the first time in a couple years. The US economy is improving which will mean more exports for the forestry industry. This should have long reaching effects for all of the region as more homes are built and demand for lumber increases. While there will continue to be struggles with the government with spending and cutbacks there is hope that it should level out soon. The federal government is set to break even in 2014-2015 and the provincial government is moving away from austerity to economic growth to reduce the deficit. The diversification of the Thunder Bay economy is also helping to stabilize the city and make it more investor friendly as seen by the increasing private investment. Construction should continue to be a big part of the city going forward. There are plans for a new 6 story condo building on Cumberland, 2 3 hotels current under construction with 1 more potentially on the way. After 60 years of service the Fort William gardens should make way for a new 100 million dollar multiplex which I’m very excited for. A lot more general growth in the city should be expected as the world economy pushes forward into growth.

These are my top 10. What are yours?

References:

http://www.cbc.ca/news/canada/thunder-bay/construction-to-start-on-waterfront-hotel-condos-1.1393520

http://www.tbnewswatch.com

CHMC

City of Thunder Bay needs to find more cash

One of the benefits to having a large amount of time on your hands is that you get to investigate. I was curious as to the costs of the new event center that Thunder Bay is planning to build with construction roughly targeted for 2016. This popped into my head as the future of the Fort William Gardens is up for discussion. The idea of tearing it down or reusing it for future uses will be something that consultants and the community work to decide. My person opinion on this is that the building has served it purpose and needs to be torn down. The land can be reused to provide a new source of tax income for the city. Getting into more details is for another blog post. I was looking at the cost of the event center and wondering about how the costs have changed since they were first presented to us. If truly they will represent the total cost of event center when it is completed. So I went to the City of Thunder Bay’s website and found the numbers presented by the consultants and went to work.

The cost of the building (nothing inside it), a parking structure, a walkway and the prep work is expected to cost around $88,742,500 based on 2012 numbers. As I said before this building isn’t expected to be under construction till 2016 to at the earliest. 4 years is a long time in the construction industry and during that 4 years costs have increased. Inflation increases is accepted to be around 3% annually but has been lower with the economic downtown. If we use the 3% inflation number over that 4 year period then the price of event center has increased roughly $10,650,000 over the initial costs estimates. That number only gets us to the date when construction is expected to start; with a 2-3 year construction period these numbers will again jump by 4-6 million dollars. That puts us at roughly $104,716,150 for a shell of a building, a walkway, prep work and a parking structure. The contractors aren’t stupid right? They put in a 10% contingency fund to make sure that if there were any cost overruns that they would be covered. That 10% amounts to about 10 million dollars which makes this overrun more reasonable. It means that the city is basically covered till the date of construction and that how long construction takes will determine the overrun. If the 3% increase was to occur yearly that increase to the overall cost would run around $2.6 million dollars. To outfit the arena with the things it needs it expected to take roughly another 6 million dollars. $2 million will be payment to Thunder Bay Hydro for forcing them to advance their dates on tearing down the substation so this cost may not increase; same with the $800,000 that the city has put aside for art. The $3 million for fixtures, scoreboards and more likely will though and again using a 6 year time period and 3% increase in inflation will see this number increase to $3.5 million dollars. This could potentially bring the number for construction to $99,692,500 after the 10% contingency fund has been spent. ($88,742,500 + $14,650,000 – $10,000,000 + $3,500,000 + $800,000 + $2,000,000 [Based on a 2 year construction period]).

Truly to me this isn’t the only cost that needs to be brought forward when we are considering this final bill to the taxpayers. We will need to do something with the Fort William Gardens and that will cost money. That is a number that should be included in these costs as the decision on what to do with the facility is a direct result of the new event center. The cost of either its demolition or its restoration is something that needs to be clear and concise when it comes to what we are doing. Again, I personally believe that the building needs to be torn down as it doesn’t meet the needs of the community or its users anymore. With the loss of that ice to both the Thunderwolves and the Northstars comes with another issues that will need to be addressed. We will need to replace that sheet of ice with another one on the south side to provide enough ice for the users to use. This again provides the city with another cost to meet the demand of its recreation and sport clients. With some foresight I believe that we could properly introduce some additional costs to this project to have both the federal and province governments pay some of the cost of demolishing this building and providing a renovation to Delaney arena. An guesstimate of an additional 20 million to the overall cost of the multiplex should help to provide enough cash to either pay for the demolition and rebuilding or the retrofit of the Fort William Gardens. If we were to add these costs and use the money we have saved to leverage the cost we would end up paying roughly $6.5 million dollars instead of the full cost of these buildings.

So what would it work out to be if we were to break it down between the 4 partners. Currently, the city expects to pay around 33% with the other levels of government covering the other 66%. Its currently trying to leverage the 35 million dollars set aside in a ReNew Thunder bay fund to get the other 50+ million from the Province of Ontario and Government of Canada. If the City of Thunder Bay wants to truly get an equal billing between the 3 levels of government it will need to increase the expected cost of this endeavor. That $11 million dollar increase in cost means that the city will need to find an additional 3.5 million dollars to leverage the Federal and Provincial government. If it doesn’t increase the costs or find additional private funding to cover the added cost it will be stuck with the 11 million dollar increase on its own. While it likely wont go over well for the next city council to already have these added costs on so early on, to avoid the increase and accept it later shouldn’t be the better of the 2 options. There is also an opportunity here to pay for the demolition/refurbishment of the Fort William Gardens and any addition to other facilities that will become necessary for the city to meet its clients needs.

I believe that this is a great opportunity for the city to improve something that has been lacking in this city for a long time. I give praise to the current and past city councils for developing the different districts (administration, shopping and entertainment) that have created the foundation for future expansion. The development of Prince Arthur’s landing and now this has created a catalyst for the redevelopment of the north core. 500 additional people could be downtown Port Arthur on a nightly basis when the condo’s and hotel are full. This is as a result of the city’s investment into redeveloping its waterfront. On top of that the private sector has taken notice of the development being undertaken. An old bar has been restored to house lofts and is already 50% sold, a new development will build a 6 story 71 unit apartment building in an underused section of town. Other developers have taken over buildings in desperate need of repair and invested in them. All this in the build up to the potential development of the new event center. It will be interesting to see the changes that happen in the city as time goes on. I am in complete support of this project but I want to make sure that the city gets the best deal for taxpayers dollars. We need to have a more accurate dollar figure when we go to the higher levels of government and make sure that we aren’t stuck with the cost overruns to deal with ourselves.

Changing the Minimum Wage

Canada has a major problem. Many Canadians are stuck or have been pushed since the economic downturn in 2008 into lower paying or minimum wage jobs. These positions were once typically designated for younger people who needed to get some experience under their belt and didn’t have the responsibility of children, debts etc. This seemed to have changed as many of the positions that have been created and touted as the resurgence in the economy as minimum wage. Currently the minimum wage in Ontario is $10.25 an hour or less if you work in the restaurant industry. As people fill these jobs that have families, debts, and responsibility there is more demand to increase the amount people make when they are working these jobs. Some people believe that with the increases in inflation and other costs it is necessary to get these raises. For others they see this as an increasing cost that will drive away businesses and cost more Canadians jobs. As it stands right now I personally feel that the best way to save the average Canadian more money is to reduce the taxes that governments take. Since this isn’t likely to happen I believe that there is another opportunity to kill 2 birds with 1 stone.

Youth have been pushed out of entry level jobs as middle aged and retired Canadians took a beating during the recession. Many of the jobs that they once worked at have left the country for cheaper markets and carved a hole into the middle class. While these events were occurring the youth sat silently and took double digit unemployment rates on the chin. During the recession and continuing today unemployment for youth has stayed in the 12-15% range while general unemployment is closer to 7%. Youth have brought on more debt, been forced into soup kitchens at higher rates then almost any other category. So how do we get youth working again while providing a fair wage to those with the responsibilities of children, household debt etc. \

I believe that we create a tiered system for minimum wage. One that sees a payment different depending on age that would allow for more younger people to be hired but also see older workers have a little more cash into their pockets. It would work something like this: Age 16-23 would start at $11.00 while people working 23+ would start at $14.00 and this would raise bi-annually at half the rate of inflation for those 2 years. This would continue till young workers were making $14.00 and older workers were making $17.00. At that time it could be reevaluated to determine if growth should be accelerated or if it should be slowed.

While initially young workers would take a hit to the pocket book it would allow for more young people to be hired. This would positively affect the huge unemployment crisis that is facing our youth today. It would allow more students to bring home some type of income and help to reduce the amount of debt they need to take on to get an education and provide a benefit to the economy. When fully implemented a young person working 20 hours a week would bring in $14560 or roughly the cost of university tuition (2013 numbers) with around 8,000 to spare. One might question if a dividing the minimum wage in order to make younger workers cheaper would negatively affect older workers employment opportunities. I don’t believe it would for a number of reasons.

Many students are unavailable during the daytime due to their education which means that older workers are the only ones available. The increase in pay would allow these workers to bring in more money and be able afford more items. It would be beneficial to both the economy and the employees with some negatives to smaller businesses that could be lessened by grants and tax breaks. A full time employee now making 10.25 an hour is making $21,320 annually to try and divide this by a family of 4 means that every person only has access to $5330 a year. If this number rises to $17.00 an hour the person is able to bring in $35,630 which is a $14,000 increase annually. This means that family of 4 will be able to access just under $9000 a year. This makes life much more affordable for people and allows more people to move away from the poverty line and services like soup kitchens, homeless shelters etc.. This reduces the demand on these services which allows them to help those who truly need it.

Raising the minimum wage all the time isn’t the answer to the issue of the loss of middle class jobs. We need to find a solution that brings back those jobs and figure out how we can recreate positions. It will take tough choices by all levels of government to stop viewing the middle class as a cash cow with unlimited resources, it will take cuts to government positions/services to reduce the amount of money taken off the average Canadian check. We will need political willpower to make ideas like these a idea for topic for discussion even if the ideas are not popular but they are necessary. We need to hold the government to do the right thing not the popular thing and do what is right for both the corporate citizen and the regular citizen.