Wednesday, March 15, 2017

Metrolinx Slurps Up Hamilton Bus Fare Money to Pay Sunshine List Jobs in Toronto

One of the reoccurring themes of this blog is the ongoing centralization of government jobs serving the province to Toronto, much like what goes on in Bangkok versus the rest of Thailand.

The Star has a good article on Metrolinx charging 905 cities a higher percentage of bus fares to support Presto, the agency's mediocre fare collecting product.

Some councillors in the 905 region are fuming about a potential new deal for the Presto fare card system and are accusing the provincial transit agency of gouging smaller municipalities while giving Toronto a sweetheart deal.

For the past year 905 municipalities have been in negotiations with Metrolinx over a new operating agreement for Presto, the provincially owned fare card system used by transit systems across the region.

A deal has yet to be reached, but a report that went before the regional council of Durham Region last Wednesday revealed tentative terms of a potential 10-year deal.

According to the report, by 2021 the seven transit agencies in the 905 could have to pay a commission to Metrolinx equal to up to 9 per cent of fare revenue they collect through Presto. The municipalities currently pay a commission of 2 per cent, which Metrolinx uses to pay the operating costs of the fare card regime.

Under the terms of a deal the TTC inked with Metrolinx in 2012, the Toronto agency pays a commission of 4.65 per cent.

Before Presto, Hamilton would have received all their transit fares for the HSR. Now using Presto, potentially Hamilton could have to pay 9% of their fare revenue to Metrolinx, which is based in Toronto. On the 2012 Sunshine List, Metrolinx had 262 people making over $100,000 a year. That's a prime example of jobs that were originally done in Hamilton, now effectively centralized in Toronto. This begs the question of whether losing 9% is worth it compared to the hassle and expense of collecting a cash or ticket fare. 

The province enforces Presto by gas tax revenues the province shares with municipalities (in a method highly weighted toward Toronto). What is more ridiculous is that the TTC gets a massive break from Presto compared to other cities (plus the jobs working on the payment system stay in Toronto).

Hamilton Mayor Fred Eisenberger should propose to the province to move Metrolinx to Hamilton from Toronto. Being a regional agency (and providing Presto to Ottawa) there's no reason it has to be in Toronto and future workers could live in a much cheaper city and much cheaper digs than Union Station.


Sunday, March 5, 2017

Hamilton Real Estate Prices Up 27.5% Year on Year in February 2017, Hamilton Centre 31.6%

The Real Estate Association of Hamilton-Burlington is reporting that in February:

Seasonally adjusted* sales of residential properties were 18.1 per cent higher than the same month last year, with the average sale price up 27.5 per cent for the month. Seasonally adjusted numbers of new listings were 2.5 per cent higher than February of 2016.

Residential sales prices going up 27.5% year on year is pretty nuts, although with Toronto prices, a hot spring was expected. Those numbers include more than just Hamilton, for Hamilton alone, the average sale price was up 27.1%. Burlington was up slightly higher at 27.6%. Hamilton freehold prices were up 27.0% versus 26.8% for condominiums, whereas for Burlington freehold prices were up a massive 34.6% versus only 15.7% for condominiums.

Some of the individual area increases in Hamilton were interesting. Mountain properties were up 29.4%. Hamilton Centre properties were up 31.6%. Dundas was only up 12%, but that was only on 39 sales. Hamilton West prices were up 24.4%.

Burlington freehold average price was almost a million dollars, up to $957,120, so Hamilton prices, especially in the lower city are a bargain by comparison. The spring should continue to be hot, however the anticipated rise in the US fed rate by a quarter of a percent (and another potential rate rise in 2017) which indirectly affects Canadian mortgage interest rates could cool things down.

This is fundamentally changing Hamilton. Rent will likely increase due to those who just can't afford to buy a house. Derelict properties will be renovated, although that has already been happening for a while.

Wednesday, November 16, 2016

Ontario and Canada October 2016 Employment Numbers, Big Gain in Part-Time Jobs for Ontario, Loss 7,200 Full-Time Jobs

Time to look at the October jobs numbers for Canada and Ontario.

For Canada, a big gain of 43,900 seasonally adjusted jobs in October. Unfortunately that total was driven by part-time job gains. Full-time jobs actually declined by 23,100 compared to a gain of 67,100. That's a ratio of 4.11 full-time jobs for every part-time job.

Since the start of the year, Canada is up 149,700 jobs, but down 12,200 full-time jobs. So the theme for the country in 2016 is basically stagnation for full-time jobs versus big gains in part-time jobs.

Ontario is similar to the overall Canadian numbers. Overall seasonally adjusted jobs were up 24,200 for the month. However full-time jobs declined by 7,200 jobs versus a gain of part-time 32,600 jobs.

For the year, Ontario has gained 52,600 jobs, an increase of 0.755%, which is lower than the working age population growth of 1.09%. For the year the number of full-time jobs has declined by 24,200 compared to a big gain of 76,900 part-time jobs. So in some sense for Ontario, October followed the overall pattern of 2016: big gains in part-time employment, small losses in full-time employment.

Given the progressive nature of Ontario's income tax system, this full-time part-time change can't be a good trade-off for government revenues.


Monday, October 31, 2016

Ontario Second Quarter 2016 GDP Up 0.2%, 0.7% Annualized

I have meant to get around posting about Ontario's second quarter GDP growth after the Finance Ministry released the results recently. As is often the case, I haven't seen any major news outlet reporting on them, but I may have missed it.

GDP growth in the second quarter was 0.2% equivalent to 0.7% annualized, versus 0.8% in the previous two quarters. Population growth in Ontario is around 0.9% annualized, so 0.7% means that per capita GDP actually declined very slightly. The US had an increase of 0.4% and Canada a decrease of 0.4%. I'm wondering if the quarter was affected by the wildfires in Alberta.

The ministry provided this helpful image with quarterly data going back a ways (which is useful in case they revise some quarters).





I'm a little surprised at how good the previous three quarters were. The third quarter of 2015 had annualized growth of 3.6% which in this era is excellent. Considering the fiscal year starts in the second quarter, 2015-2016 was a good year for Ontario. Now with the slow start in 2016-2017, this fiscal year could be less impressive. Certainly the 2015-2016 fiscal year corresponded with the Canadian dollar tanking which was likely a strong factor for growth.

Exports were again negative in the quarter: "Exports declined 3.3% in the quarter, following a strong increase of 6.2% over the previous four quarters. The decline in exports was largely concentrated in international goods (-5.3%), with fewer exports of motor vehicles, consumer goods, and metal and non-metallic mineral products." So previous to this quarter, exports likely benefited from the weak currency. What happened this quarter I'm not sure about, although I'm guessing it was auto production related. With slowing auto sales in the US, there could be future problems for Ontario exports.

"Business investment advanced by 0.6%, adding to the 0.9% gain in the first quarter. The second quarter gain was led by a 0.9% increase in residential construction investment, reflecting strong resale activity. Business investment in machinery and equipment (+1.5%) rose, while non-residential structures (-0.8%) declined and business inventories were reduced slightly. Government current (+1.0%) and capital (+0.4%) expenditures rose in the quarter." That is good news compared to what had been going on the last few years in business investment, although the residential aspect is troubling.

"Sales of existing homes were 9.3% higher in the first eight months of 2016, compared to the same period in 2015." So what little growth there was, was influenced heavily by the real estate sector. Any pullback will cause Ontario a lot of problems.

The third quarter numbers should be interesting. The first estimate for US growth was 2.9% annualized after two weak quarters, so perhaps Ontario's exports will bounce back.



 

Sunday, October 23, 2016

Ontario Keeps Hydro Prices Frozen

A little surprisingly, Ontario has kept electricity prices frozen for the on peak, mid peak and off peak rates for the new period starting November 1st. Ontario sets prices on May 1st and November 1st every year.

This past May prices went up 0.5 cents to 18 cents for on peak, off-peak went up to 8.7 cents. Mid-peak went up to 13.2 cents per kilowatt hour.

2016 was an exceptionally hot summer, so demand was high. Somewhat paradoxically, that's better for rates as Ontario often has a surplus of power and expensive solar and wind have to be paid no matter what the demand is. More solar and wind supply is still slated to come online for some time, so a mild winter with a lot of wind could cause some problems. The rate increase for May 2017 should be interesting.

Update:
Also I forgot that the provincial carbon scheme kicks in in January which will also result in some increasing pressure on electricity prices. Since nuclear, hydro, solar and wind isn't really affected, the only real source that will be affected is natural gas which is relatively minor. I haven't seen an estimate of how much higher electricity prices will be.

Monday, October 10, 2016

Ontario and Canada September 2016 Jobs Numbers

September was a pretty good month for both Ontario and Canada for total jobs numbers. Canada was up 67,200 in September, while Ontario was up 22,000. Full-time jobs is another story. In Canada, full-time jobs were up on 23,000 while Ontario actually lost 5,200 full-time jobs.

Since the start of 2016, Ontario is up 27,200 total jobs, but the province has actually lost full-time 17,000 jobs year to date. That's despite a growth in the working age population of 113,400. So job growth versus population growth has been weak in Ontario in 2016, especially for full-time positions.

According to the Ontario Ministry of Finance quarterly accounts, for the first quarter of 2016, GDP growth was 3.0% annualized. I'm skeptical that the second and third quarters will be close to that considering the weak job growth year to date. Can Ontario have GDP growth with weak job numbers?  Possibly, but that would imply decent productivity growth and given the lack of business equipment investment of late, that strikes me as unlikely. The second quarter GDP number should be interesting.

Sunday, October 2, 2016

Ontario August 2016 Employment Numbers

With the September numbers coming out soon, it is time to say something about the August Ontario job numbers.

In Ontario, seasonally adjust employment was up 10.5K in August, but still down from July, June, May and April. Compared to December 2015, 10.9K while the working age population grew by approximately 100K over the same period.

Full-time employment was up 8,600 over the previous month in Ontario, with part-time jobs up by 1,700 jobs. Full-time employment is actually down 11,800 jobs for 2016.

The September numbers should be interesting, as 2016 is shaping up to be a weak year for employment growth in Ontario.