The Thunder Bay Chamber of Commerce represents over 850 businesses and over 20,000 employees in our community. Our membership includes businesses of all sizes and from all sectors of the local economy.
Nearly 90% of our members are small businesses with less than 25 employees. These organizations are the lifeblood of our city providing the services, supplies and supports that make Thunder Bay such an amazing place to live, work and play.
Businesses of all sizes, but in particular small businesses, are facing a challenging future as employers look for new ways to adjust to increasing costs, staff shortages and a fragile economy. The Bank of Canada projects a slowing in Canada’s economy, averaging out to 1.7% real GDP growth in 2019 and 2.1% in 2020. Thunder Bay’s economic growth in recent years has tended to be lower than the national and provincial averages and we are not aware of any data to suggest that the next 24 months will reverse that trend.
It is through this lens that business owners and operators, and their employees are considering the 2019 municipal budget, user fee increases, and the proposed 3.25 percent increase in tax funded spending.
We recognize that The Corporation of the City of Thunder Bay is facing challenges too. On the income side, the loss of tax revenues through reassessments are cutting into city collections, while inflation and other cost increases mean every dollar buys a little bit less as the expense side creeps upward. This combination is making it harder to continue to provide the breadth of city services that citizens are accustomed to, at a level of taxation that the community can afford.
We appreciate the efforts that have been made by Council and Administration in recent years to implement cost controls. The $14.2 million dollars in savings that have been found to date benefit all taxpayers year over year. These savings equate to about seven cents for every dollar of taxpayers money that is proposed to be spent this year.
It is vital for Council and Administration to consider that since 2012, taxes collected have risen from $157 million to this year’s proposed $196 million – an increase of tax-funded spending by $39 million dollars, nearly 25% percent, compared to the average rate of inflation of less than 14%*. During that timeframe, our total population has remained relatively stagnant and our assessed tax base has declined.
At the same time, water and wastewater costs have risen substantially for both residents and businesses. While the annual added residential water cost of $34 dollars doesn’t sound like a lot, the compounding of these costs year after year means that our residential water bills are hundreds of dollars more now than they were in 2012. For high-water use businesses such as hairdressers, restaurants and hotels, water bills are rising by thousands of dollars each year, despite the installation of reduced flow toilets, showerheads and faucets. One local member hotel advises that their water costs have ballooned by $15,000 dollars in just 4 years.
As you review the budget over the next few weeks, please understand that both residents and businesses have limited capacity in their wallets for the continuation of these ongoing cost increases. The Chamber cannot support a 3.25 percent tax levy increase and implore you to find reductions to bring the total tax-funded spending increase to no more than 2 percent for this year’s budget.
The Chamber has long advocated for a Service & Spending Review. To be clear, this Service & Spending Review would be the starting point of an informed, community wide discussion on the future of municipal expenditures. Through the Service & Spending Review, our community would learn the number and cost of programs that the City must provide to meet Municipal Act obligations. This would, in turn, educate Thunder Bay’s citizens on the number and cost of non-mandated services. A conversation could then begin on the relative value of non-mandated municipal programs in our community’s pursuit of its strategic plan.
Cutting expenses should not be automatically assumed to result in service reductions. The private and public sector provide examples of creative service delivery changes that have simultaneously reduced costs and improved services. The rhetoric that each dollar cut brings an equal reduction in services is simply not true. Chamber members don’t manage their businesses that way and they do not accept that from their private or public sector suppliers
We urge you to review non-mandated services and consider factors including whether they are competing with local business, the number of citizens who utilize the service, whether alternate service delivery or private-public partnership opportunities exist, and the overall evaluation of whether it is a “must have” or a “want to have” service.
We applaud Council for taking an important first step to address the tax burden by directing Administration to prepare a City Services Profile that outlines the mandated and non-mandated items that comprise the City’s budget and the costs for each. These efforts should be expanded by focusing spending decisions on core municipal services over non-essential items, eliminating duplication, streamlining processes, and implementing new technologies to find efficiencies.
In the Chamber’s election candidate survey, each of you around this table committed to fiscal transparency, to a services and spending analysis, and to accountability. We are here to work with you to help to fulfill those promises.
We all love this community and we want to achieve our shared vision of a city that is connected, healthy, vibrant, and strong. We wish you well as you work through the budget with that vision in mind.
Visit the City of Thunder Bay website to review the 2019 budget documents for more information.