Ferrochrome, opioids, high taxes, "historically low" unemployment rates and badass breakfast bacon were all touched on by Mayor Provenzano last night during his 23-minute, 3,700-word State of the City address.
"The reality is that we cannot cut our way to lower taxes," His Worship told a crowd of approximately 50 citizens gathered at the Canadian Bushplane Heritage Centre.
"Affordable taxes come when the burden is shared across a larger assessment base. We have not had the benefit of significant residential, commercial and industrial assessment growth that many communities in southern Ontario experience. To the contrary, especially in our industrial class, we have experienced a decline or stagnation.
"Simply put, we need residential, commercial and industrial assessment growth," Provenzano said.
State of the City addresses are popular in Sudbury and other communities, but have never really caught on in the Sault.
At the instigation of city staff, the mayoral speech was combined this year with a budget consultation attended by councillors from all five wards and staffers from every city department.
The 50 citizens in attendance were considerably more than the handful of attendees who usually show up at municipal budget consultations.
There were also 50 municipal employees in the hangar, one for each of the citizen-guests, some of whom took advantage of free Sault Transit transportation laid on for the event.
The following is a full transcript of Mayor Provenzano's State of the City remarks.
The bolded subheads were not written by the mayor, but were added by a sometimes-irreverent SooToday staff writer.
It is my pleasure to welcome everyone to the Canadian Bushplane Heritage Discovery Centre.
I acknowledge, with respect, that we are in Robinson-Huron Treaty territory, that the land on which we are gathered is the traditional territory of the Anishinaabe; home of Garden River First Nation, Batchewana First Nation and the Metis Nation.
I also acknowledge that this area is historically known as Bawating.
I want to recognize all of the City councillors in attendance with us tonight.
We have Sandra Hollingsworth, Lisa Vezeau Allen, Luke Dufour, Donna Hilsinger, Rick Niro, Marchy Bruni, Corey Gardi and Matt Scott.
It is great to see so many members of council here, and I want to thank them for making the time.
It has been a pleasure to work with each of them and I look forward to the remainder of our term.
I have a tremendous amount of confidence that this council can and will make good decisions that are in our community’s best interest.
I also want to recognize our senior management team and all of the city staff who are with us.
Larry Girardi had his first granddaughter today.
Tonight’s event was really driven by our staff, who wanted to do something to increase engagement with our community regarding the budget.
They worked very hard behind the scenes to prepare for this Town Hall and I want to thank them for their efforts.
After the speaking portion of this event concludes, staff and council are here to speak with you about some of the exciting projects we are working on, accept your feedback on whatever you think is important and answer any questions you may have about the city or its operations.
We hope you will stick around and engage us.
I want to start with some personal observations.
The entire last term of council was occupied with significant economic uncertainty.
We did not know what the modernization of the OLG’s lottery assets or the privatization of its gaming assets would mean for our community.
A dramatic drop in oil prices and a decrease in western Canadian oil and gas exploration slowed Tenaris Algoma to a skeleton crew and Algoma Steel went through its third restructuring in 30 years.
This restructuring took three years and saw millions of dollars of our community’s gross domestic product dissipate.
I don’t raise this to relive it or to refer to contextualize decisions that we have made or should make.
I raise it because throughout this process I personally came to the realization that as a community we often frame our economic challenges as a lack of economic diversity or opportunity.
Sliding toward a demographic cliff
While that is natural and could arguably be correct, I believe that our economic challenges are more accurately understood in the context of and informed by our community’s demographics.
I also believe that, from a problem-solving perspective and a community development perspective, this is a more helpful and productive approach.
Our demographic challenges are not unique to this community.
Indeed, communities across Ontario are experiencing some of the same trends.
These trends are, however, more acute in Northern Ontario and certainly in Sault Ste. Marie.
The average age in the Province of Ontario is 40, whereas the average age in Sault Ste. Marie is 47.
Twenty-three percent of our local workforce is over the age of 55. That represents approximately 8,500 jobs.
Forty-seven percent of our workforce is over the age of 45. That represents 17,390 jobs.
Half of us will retire over the next 10 or 20 years
As these statistics indicate, we are an aging population with almost half of our workforce expected to retire over the next 10 to 20 years.
This situation is already playing out across our community.
We have spoken with and heard from employers, big and small, in all industries.
Employers are having a difficult time filling vacant positions.
Business owners are having a difficult time succession planning.
A recent report produced by the Conference Board of Canada illustrates this situation.
They project our local economy will continue to grow over the next few years, and that growth could be higher than expected if we addressed our labour market.
Historically low unemployment rates
The report states: “A net total of 5,500 jobs were created in 2016 to 2018, cutting the unemployment rate nearly in half from 8.9 per cent in 2015 to 4.5 per cent last year, and an average of 4.8 percent so far in 2019.
A drop to 4.6 per cent is in the cards for 2020.
These are historically low unemployment rates for this region and partially result from slower growth in labour force than in employment.
Furthermore, we just had a report come to City Council at our most recent meeting about a boost in the city’s credit rating.
The analysis reads: “Sault Ste. Marie's challenging demographic profile limits the city's growth prospects. However, the city has been selected as part of the Rural and Northern Immigration Pilot, a federal government project to help smaller rural and northern communities attract and retain foreign skilled workers to meet their economic development and labour market needs. This could be positive for the city's long-term economic prospects.”
Bolstering our labour market
It is clear that the development of our labour market is a top community priority and we are approaching the challenge a number of ways.
Through FutureSSM the city has added a labour market position and we have developed a plan we call R3: Sault Ste. Marie, which lays out a series of goals and actions to retain our youth, recruit newcomers and repatriate Saultites that have left the community.
Through this plan, we are working with employers across our community and alongside Algoma University and Sault College.
We appreciate that we have to take a multifaceted approach.
Retaining our youth is different from recruiting migrants and immigrants which is different from repatriating Saultites.
However, it is important to recognize that while each goal may require different efforts, there are underlying principles that tie each of these things together.
No matter whether we are retaining, recruiting or repatriating, we have to communicate a positive message on behalf of our community, we have to be a community that people find welcoming and safe, we have to be a place where people have opportunity and see a future for themselves and their families.
"These are not simply things to do. They are not things that can be done by one person in a singular instance. These are big things: being positive, being welcoming, creating opportunity.
They are, at their core, cultural and they require a broad based and systemic community effort on an ongoing basis.
They require a plan, teamwork and commitment.
Turning the corner
I can tell you, unequivocally in my opinion, that these things are happening here and I want to spend the remainder of my time outlining just some of the ways this is the case.
As many of you are aware, as a result of the community adjustment committee process, decisions made by our last council and supported by this one and the work of the FutureSSM team, the city has focused some of its staffing and monetary resources on community development.
The Clergue Park Skating Trail was a big hit this past winter. We cut the ribbon on the Splash Pad at the outset of summer and we can say, without hesitation, that children and families have enjoyed these new recreational options.
We have made some important decisions about and a commitment to the revitalization of our downtown core.
We have a responsible plan that will see our downtown significantly changed by the end of this council term without adding to the tax levy.
The Bay Street project will be complete to Brock by the end of this construction season and finished early next.
Queen Street will be cleaned up and resurfaced, we hope, by the end of 2021.
The marina infrastructure has been rejuvenated.
The public art projects have been a very well received success and we have developed a plan to build a plaza in the heart of our downtown.
The plaza project, including the Spring Street redevelopment, is important.
It draws up and connects our beautiful waterfront to Queen Street.
It gives our downtown a focal point and community gathering place and it can create much needed pedestrian traffic in the heart of our community.
All of these projects are doable and will be complete if we stay focused on investing in our community, in a responsible way, and developing infrastructure and space for people to use and share.
But it is not just a matter of creating space, people have to feel comfortable in that space.
People have to feel safe.
In that respect, I would like to take a few moments to address community safety.
I have had a number of people reach out to me, and I know a number have reached out to our city councillors, to express concern about an increase of non-violent crime like thefts from vehicles and garages and the damage that results from such activity.
I want to acknowledge that these are real and legitimate concerns.
If we simply judge from the violent crime statistics, we live in one of the safer communities in our province but we can’t just judge it simply from that perspective.
Any crime can make someone feel unsafe or vulnerable and, as a municipality, we have to make sure that we are responsive to these concerns.
Cops and dollars
We have to ensure that our police service is funded property and that we have an appropriate number of sworn officers.
I can confirm that it is and we do.
For fiscal year 2020, our Police Service budget is $28.9 million dollars.
We have 135 sworn officers here in Sault Ste. Marie.
Both of those numbers are healthy compared to municipalities of similar size or within our region.
I can assure you that the chief and the deputy chief are focused on responding to our calls for service and making sure that our front line is properly staffed.
However, we have to recognize that the police service cannot solve the challenges we face in isolation or by themselves.
Many of the calls to the police service are social disturbance or mental health calls and some of the increase in non-violent crime that we have recently seen is directly related to the opioid epidemic.
We are all aware that the opioid epidemic has affected our community as it has communities across our province and our country.
Our community partners have come together to support the Sault Ste. Marie and Area Drug Strategy Committee.
Through the committee, we developed a call to action and we have a drug strategy coordinator working with the service providers and the front-line workers to implement its recommendations.
Our community has lobbied and will continue to lobby aggressively for a Level 3 Withdrawal Management Facility.
We will continue to make the case to the provincial government that our service providers do not have adequate funding to meet the overwhelming need for addictions and mental health services.
We are also working on a community wellness plan that we hope will will have completed with our community partners, by next year.
All of this is to say that myself, your city councilors and your staff, both at City Hall and Sault Ste. Marie Police Sservice, have heard you and are working to address the issues you have raised.
We are working within our own means and with service providers across our community to address the real and complex challenges that we face.
Before I speak about affordability and the City’s budget, I wanted to spend a moment on the efforts we are making to create and support economic opportunity in our community.
There is a lot of good work being done to promote and improve our community as a tourist destination.
We are seeing an increase in Great Lakes tours and we hope to continue to develop that market.
We are intentionally focused on developing our bona fides as a cycling destination and hope to build more cycling infrastructure.
We have an ambitious project to develop the Farmer Lake Mountain Bike Trail Network that we hope will attract more cycling events and cyclists – and tourism dollars – to Sault Ste. Marie.
This year is the first year that we have collected an accommodation tax which we will be able to use, on a going forward basis, to promote tourism, market our community for tourism and develop infrastructure to support tourism.
There are certainly bright days ahead in this regard.
Angela's badass bacon
We shouldn’t, however, lose sight of the many private-sector successes around us.
Last week I co-hosted the Northern Ontario Business Awards and our community had three award winners:
- Gerald Fowler and Manna International for the Export Award
- Brad Gregorini and Norpro for the Judges’ Choice Award
- Angela Caputo from the Breakfast Pig for the Young Entrepreneur of the Year Award
Gerald’s company, operating right here Sault Ste. Marie, has a long and highly successful track record of supplying soybeans to Europe's leading soyfood companies.
Brad’s company was recently recognized as one of Canada’s fastest growing companies in our country, and Angela is a leader in the farm-to-table movement, sourcing her product locally and making great breakfasts.
They are all inspiring and I believe that we can and need to do a better job recognizing and celebrating our local successes.
We have many businesses and business owners across our community who are adding to it and helping build it on a daily basis and we are seeing more young entrepreneurs open up shop like Outspoken Brewery on Queen Street, Discover the Canvas on Wellington Street West and Scott Coffee Co. on Northern Avenue.
We should, all of us, buy local and support local as much as we can as their success becomes our community’s success.
We have seen an increase in business activity downtown and new private sector investment in realty across the community.
Buildings are being refurbished or renovated from Bay Street to Wellington Street to Great Northern Road.
I did a tour of China Steel this week. The size of their operation, their technology and capacity, is impressive.
The F-bomb: ferrochrome
So we should be mindful not to let the larger projects or companies eclipse these successes and, in that respect I wanted to take a moment and share some thoughts on the Noront project, as it has been the topic, lately, of much discussion, some of which I believe is very productive and important but some of which is inaccurate.
In either event, I think that I, as the mayor of your community, have a responsibility to be clear about and share my own perspective.
In November 2016 the Sault Ste. Marie EDC began discussions with Noront Resources about the Ring of Fire development and its potential ferrochrome production facility project.
On May 10, 2017 the Sault Ste. Marie Chamber of Commerce hosted Noront for a luncheon at which the company’s executive team did a presentation on its project to the general public that attended that luncheon.
On May 29, 2017 City Council passed a resolution, unanimously recognizing Noront’s efforts to visit Sault Ste. Marie and committing to continue working with them as the site selection process unfolded.
In November of 2017, Noront issued a request for information, inviting four communities to make a submission on why that community should be considered for the construction of a [ferrochrome production facility] to process chrome ores that Noront intends to mine in the Ring of Fire.
The submissions were due on February 2, 2018, and four communities made submissions: Thunder Bay, Timmins, Sudbury and Sault Ste. Marie.
On July 13, 2018 it was announced that Timmins and Sault Ste. Marie were shortlisted and were being considered further.
On May 7, 2019, it was announced that Sault Ste. Marie’s submission was successful.
Since that time, Noront has negotiated a land use agreement with Algoma and an engineering agreement with Hatch.
Those agreements were announced on September 20, 2019.
Everything that has happened to date has happened in the full view of the public and has been thoroughly reported on throughout.
Nothing else has happened. There is no agreement between the city and Noront.
Noront does not have the authorization or necessary permissions to construct the facility on Algoma property.
Noront will not be able to obtain a permit to construct the facility on the Algoma property unless and until it goes through both a provincial and a federal environmental assessment process.
The city has been clear with Noront that it will not support the construction of the facility on Algoma’s property if the city believes or has reason to believe that the operation of the facility will have an adverse effect on people’s health or if the city is not satisfied that the facility is operating safely.
Biggest opportunity ever
From my perspective, I have an abiding confidence that our community can and will make the right decision about this project.
Further, I believe that going through this type of process and having an informed and intelligent public discussion about the project and what it means to our community, is a great opportunity for our community provided we approach it properly.
Our community has simply never had the opportunity to consider a project this big, and big it certainly is.
From my perspective, it has to be considered soberly, thoughtfully and carefully and only once it has been should we, as a community, say yes or no.
There are strong feelings on both sides of this issue and credible arguments for and against this type of facility.
I don’t intend on canvassing those this evening but I think it is important that we are all, especially those who are entrenched one way or the other, respectful of each other’s opinions and each other's right to hold those opinions.
For my part, I will not prejudge the project in any respect.
I will not allow the size of the spend, the new employment opportunities, the added GDP or the added realty assessment to cloud or overwhelm a proper and thorough consideration of the potential environmental and health risks.
If we engage this process properly, I have confidence that the decision made at the end of it will have the strong and clear support of the large majority of our community and it will be in its best interest, whatever that decision happens to be.
I want to end by talking about affordability since we are here tonight in the context of the city’s budgeting process.
I assure each of you that all of your city councilors, myself and city staff are concerned about the rising cost of living and how the municipality is impacting that cost of living.
In 2015, my first full year as mayor, total budgeted municipal expenditures including the [District of Sault Ste. Marie Social Assistance Board] and local and levy boards was $186.9 million.
In 2019, total budgeted expenditures including the DSSAB and local levy boards were about $186.3 million.
The municipal-only part of that number was $115.5 million in 2015.
In 2019, the municipal-only part of that number was $119.2 million dollars.
So from 2015 to 2019, the municipal-only part of the budget rose three per cent.
This increase is significantly lower than the inflationary increase over the same period of time.
But I say this recognizing that we have more work to do.
According to the most recent census data, the average household income in Ontario is $75,000, while the average household income in Sault Ste. Marie is $63,000 dollars.
So the simple point is, what is affordable elsewhere may be not as affordable here.
So, as mayor and council we appreciate and respect that our decisions have a real and present impact on you and that we have to work every year to find efficiencies and offset, as best as we can, rising operating and costs.
We have completed an IT review and we are going to do our best to find the resources we need to improve our corporate IT capacity, which is severely dated.
In doing so, we are hoping to find more efficient and cost-effective ways to interface with the public and to deliver services.
We are also completing a service delivery review so that we can determine where, internally, we can improve.
Just as important, we want to ensure that we are allocating your tax resources to the areas they are most needed and provide most value to you.
This is why forums such as this are so important. We need to hear from you. We need to know what you think.
We cannot cut our way to lower taxes
We also need to continue to make difficult decisions about our spending and the services that we provide, while balancing those decisions with the investments our community needs us to make to move forward.
We made one of those recently with multi-residential garbage collection.
That was not a popular decision but it was one the majority of council felt necessary.
However, the reality is that we cannot cut our way to lower taxes.
Affordable taxes come when the burden is shared across a larger assessment base.
We have not had the benefit of significant residential, commercial and industrial assessment growth that many communities in southern Ontario experience.
To the contrary, especially in our industrial class, we have experienced a decline or stagnation.
Simply put, we need residential, commercial and industrial assessment growth.
With assessment growth comes a broader base to share the burden of operating a municipal corporation and this circles back to my comments at the outset.
What we need
We need to develop our community. We need to tell a positive story.
We need to be a welcoming community where people feel safe.
We need to be a community where people have opportunity and see a future for themselves.
We need to come together, like we are tonight, to discuss where we are and where we are going and what we need to do to get there.
For my part, I am confident we are on the right path and that if we continue, we will rise to these ambitions and the rest will follow.