(Originally published Jan. 12, 2019)
BUDGETING. It’s pretty much everyone’s least favourite subject. Whether city councillors, public administrators or property owners, the annual budget is a headache, and then some. Marrying what we’ve got with what we need, and want, is an exercise in frustration. Unless you’re loaded in which case you get no sympathy.
We’re talking about those whose finances are stretched thin. And Thunder Bay city council is squarely in that category. Barely a month in office, council sat down this week with a budget overview presented by administration. It isn’t pretty.
If Thunder Bay were to stay on this course for the next four years — no changes in service or spending — taxes would increase by more than three per cent each year — 3.8 per cent next year alone. That’s higher than the consumer price index and is not sustainable, said council budget chair Mark Bentz, “because at some point you’re going to be taxing more than people make.”
Thunder Bay has an annual infrastructure deficit — a backlog of things to fix — of $20 million. In other words, the city could spend $20 million more each year until about 2034 before all roads and other facilities are up to standard. By that time, of course, much of what was fixed this year will need a new round of maintenance.
So where can council look for savings?
The most recent study of Ontario municipalities by BMA Management Consulting is often used to see where the city stands relative to others of its size. A persistent complaint is that residential taxes here are too high. Taxes on the average single-family detached bungalow are $3,752. That’s about $350 higher than the overall provincial average but lower than the average of cities larger than 100,000.
Add a second storey to that home, however, and somehow the average taxes rise to $5,866 — nearly $1,300 higher than the provincial average and third highest on the list. In every category aside from motels and large industrial, city taxes are higher than average, sometimes substantially.
Average property tax as a percentage of income is just under four per cent — about average for all Ontario municipalities and third lowest among the 26 larger cities. BMA puts the average Thunder Bay household income at $87,350 and the median value of dwellings at $207,544.
Still, there are a great many people who find it difficult to make ends meet. Many of those who have nice homes and vehicles are deep in debt. Lots of people live paycheque to paycheque. Meeting the needs, and wants, of all citizens is council’s responsibility.
Council heard from the public this week and of the 50 or so who bothered to show up, most wanted more spending, not less. Only the chamber of commerce had a savings suggestion — contract non-mandated services to the private sector. Experience tells us that could hurt service levels. But with proper controls this is something to consider.
Where Thunder Bay really stands out like a sore thumb is in the BMA category of general government which consists of three categories: governance, corporate management and program support. Here, Thunder Bay ranks seventh highest in all of Ontario. Sorted by net costs per $100,000 assessment, including amortization, the per-capita cost of general government in Thunder Bay is $182 versus a provincial average of $82.
“The costs for governance and corporate management can be influenced by the municipality’s organizational structure and method of allocating costs,” the study says. It also makes a point of leading its executive summary of Thunder Bay with the category of “socio-economic factors” which include the “ability to generate revenue relative to the municipality’s demand for public services.” A leading factor in this equation is “a need to shift public service priorities because of demographic changes in the municipality.”
It is no secret that Thunder Bay’s status as a hub for migration from remote northern First Nations is putting a strain on a variety of city services. The cost of policing alone in Thunder Bay is second highest among large Ontario municipalities as is the cost of general assistance.
This is a hard-drinking town that is notoriously difficult to police. People in trying circumstances deserve help and while no one demographic is solely responsible for demands on services, the burgeoning Indigenous population is clearly a factor.
To expect city taxpayers to fund these increased costs while enduring reductions in senior government supports is patently unfair. Thunder Bay has tried to make the case to Queen’s Park that more resources are essential to manage its many social challenges. So far, the response has been minimal.
So where can council look for savings? Here again the BMA study paints a few interesting pictures.
Is there a reason why Thunder Bay’s fire service costs are second highest among all Ontario municipalities? One reason is the province’s unwillingness to tackle the ridiculous practice of salary arbitration awards which simply order the municipality to pay what the last highest one paid its fire service without any consideration of ability to pay. Anyone who thinks Ontario’s Sunshine List is reserved for senior executives should check the number of firefighters on the $100,000-plus roster.
Going down the BMA list yields further services for council’s budget consideration. Thunder Bay is among the highest-cost jurisdictions for its conservation authority, roads, bridges and culverts, traffic operations, transit services, street lighting, waste collection, ambulance service, assistance to the aged, parks and recreation facilities. Thunder Bay has the highest-cost library system among all large municipalities.
These are all important services that many people rely on. There have got to be reasons beyond Northerness for their costs to be so high. Can this council find them where others have failed? Deliberations begin on Tuesday.
Ian Pattison is retired as editorial page editor of The Chronicle-Journal, but still shares his thoughts on current affairs.