Category: economics

Disappointing Impressions on my Return to Ottawa from Charlotte, North Carolina

January 5, 2023

Driving along Merivale Road, in Ottawa, my neighborhood looked run down and dirty at the end of December. Yes, the melted snow was dirty gray bordering Merivale. And the road was full of potholes. As well, it was overcast and gray and the designless and helter-skelter development that has sprung up over the years along

Merivale showed its age and need for updates.

I felt depressed and found the contrast with sunny Charlotte with its clean, well-maintained streets and shiny new shopping centers dispiriting. I left Charlotte the day before.

Ottawa’s infrastructure has deteriorated, and maintenance declined over the years. For example, the snowplows cleaned a wide swath of roadbed years ago compared to the narrow lane left today after the snowplows drive by.

Has the quality of my neighborhood gone down? You be the judge. I’ll just describe what has been happening in my neighborhood, along with my biases.

First off, we have “cash marts” stores just around us, stores I consider cater to people who are hard up and must cash cheques to survive on a day-to-day basis. Sure, there are people like that, but I thought my neighborhood was a more stable, middle-income area with expensive homes.

A block from us, a cannabis store opened and there are a few more of them, less than a mile away. Again, there must be a market for such outlets, but I did not think my neighbors were into drugs. Maybe I am getting old and out of phase with today’s reality.

I do not cotton to cash marts and cannabis outlets in my neighborhood, especially when we also have bottom-feeder consumer outlets like “dollaramas” and used clothing establishments like “value village”. Should I go further?

There is nothing wrong with cash marts, cannabis outlets, and hand-me-down clothing stores. There is a market for those. But coming back from well-maintained Charlotte where I did not see any of these (cannabis stores are not allowed in North Carolina), driving along Merivale Road, with the dirty snow along the road and navigating around potholes on a rainy, gray day, was a downer for me.

But wait, are there any bright spots? I drove by a plethora of ethnic food establishments, which I like, including Chinese, Japanese, Korean, Indian, Mexican, and Italian, besides traditional English fare. The neighborhood also boasts two sports pubs and takeout places for pizza and chicken. And we have several food store chains near us, three in walking distance (Walmart, Loblaws, and Food Basics). These are great conveniences, along with a Starbucks and a couple of fast food/hamburger places (A&W and Harveys). None of these outlets are fancy; they are run-of-the commercial chains. Maybe I should not say that these are bright spots, but I cannot complain about the lack of eateries or grocery stores in my neighborhood.

But beyond the food scene and the usual gas stations, banks, and a couple of gyms, there are no upscale retail stores or cultural/entertainment facilities at all. The area just does not, or could not, attract fashion, electronics, furniture, or other upscale stores over the years. I am not sure why.

Is my neighborhood on the downslide? Maybe not. Maybe it is in transition; the low-slung, decaying buildings are probably rented at reasonable rates, therefore many family-run ethnic outlets can thrive.

But we also have a sea of parking lots and with the growth of the city, further development via densification will happen. We’ll be looking at mixed highrise buildings, with commercial establishments on the lower levels topped by residential units above.

Last fall, I joined zoom meetings with developers and Ottawa city planning staff, reviewing development proposals. In this process called “public engagement”, the City attempted to draw out public opinion on private proposals. In the proposals we reviewed, there were thousands of residential units in highrise buildings, within walking distance from my place, all containing commercial uses at the lower levels.

I drove home and after thinking about the planned developments I saw in Charlotte; I decided I much prefer those to the haphazard, aging, and messy character of my neighborhood. Unfortunately, my area will change, and I am not sure it will be for the better. I am afraid unaffordable rents in the future may squeeze out my favorite small mom-and-pop food operations, unique in my neighborhood. On that gray day after my return from sunny Charlotte, I felt in the dumps driving along Merivale Road.

A New Divide: People Who Work From Home vs. Others. Wonking Out

May, 10, 2022

The pandemic has accelerated the trend in “teleworking”, or what is called today “work from home”. Governments and companies encouraged workers who could work from home to do so to reduce potential infections in the office. But who are these workers and what impacts has this movement had on our daily life?

According to Statistics Canada, over thirty percent of workers worked from home, between April 2020 and June 2021. In 2016, only 4 percent of people did so. A massive change in the work environment, mostly triggered by Covid, I think.

The composition of this home-based workforce is interesting. According to Statistics Canada, seventy percent of people who worked from home were in the “professional, scientific and technical services” industry category.

By income, eight percent of people in the bottom ten percent and over sixty percent of people in the top ten percent of wage earners worked from home.

So better educated and higher-income people seem to have been given a greater opportunity to work from home than others (education and income are usually positively related).

But, there are other consequences resulting from this trend. A recent article by a city planner in Vancouver envisioned that the work-from-home movement could result in larger homes because of the need for a home office. And larger homes need vacant terrain to be subdivided, gobbling up choice agricultural lands around major cities in Canada. The article also envisioned a home with more outdoor space than the norm today, considering people will avoid public spaces and parks for fear of infection.

The article surprised me since current city plans, including Ottawa’s, strongly encourage “densification”, to save on infrastructure and minimize carbon emissions by reducing the daily commute. Perhaps the need to build larger homes for work at home will decrease in time, paralleling the elimination of Covid, if that is possible. Not a likely event in the short term.

I provide all of this context to introduce the nub of a potential issue: people love working from home and the trend toward it may create a new divide. The lucky ones may continue the work-from-home routine while others may never get to enjoy it. Now I have not done a professional survey but have anecdotal evidence from talking with many people who love to work at home and never want to go back to the office.

People I talked with gave me many reasons why working from home is advantageous: you can choose your hours of work; you save time by not having to dress up to go to work; you save money by not buying coffee or lunch and commuting (save on gas, parking or transit costs); and you can take care of daily activities like shopping, taking children to school; or go on a bike ride or run when times are nice.

But, there may be downsides as well. You may miss the watercooler talks catching up on what is going on in the office; miss meetings in person where you may find out more about projects through the body language of others (zoom meetings provide less communication than in-person meetings). You may miss opportunities to show your skills and knowledge to your boss in ad hoc situations that could lead to promotions. Recruits may find it difficult to learn the culture of the organization being away from the office. And some people may find it intrusive that some bosses may call you on a 24/7 basis.

Another unanticipated consequence of working from home may be that office buildings stay empty, taking away the livelihood of many businesses serving office workers. But, of course, companies and governments save money on reduced office space demand.

I remember people blamed the recent convoy in Ottawa for destroying the restaurant industry downtown. But have you considered that the government in Ottawa, ordering employees to work from home for the last two years, may have been a key factor that killed the restaurants downtown?

It may take a few years before we see the light on whether the work-from-home trend will continue. But, to date, this movement has created a divide between those who can avail themselves of this attractive way of working versus others who just cannot do it. And it has created incentives toward low-density urban development conflicting with current city planning objectives to densify to reduce greenhouse gas emissions and save good agricultural lands. Just my opinion.

The tremendous push in Ottawa for bicycling. Is it reasonable?

January 26, 2022

A week ago, the National Capital Commission in Ottawa announced the sale of a part of their lands for the construction of 601 residential rental units. Half of these will be “affordable”, or below-market rent units. What caught my attention was the proposal will provide 600 indoor parking spots for bicycles and 200 underground parking spots for cars. I read it twice: there will be 600 indoor parking spots for bicycles! And obviously, the NCC agreed with the proposal since they picked it from among three competing finalists.

So what is going on here? Clearly, there is a tremendous push for cycling, a push for encouraging people to use the public transit system, and a sideways nod to those people who still want to drive.

Now, Ottawa has a cold climate and most people get on their bikes for four to six months of the year. I would say that three to four months are desirable for biking when one does not need gloves to ride. During the winter months, the snow cover is treacherous for biking, coupled with cars that often lose control on ice-covered roads.

I am not against biking in Ottawa, and I enjoy riding during the summer months. But riding is most popular in the Netherlands, Denmark, Germany, Sweden…. where the climate is much more suitable for riding, where the cities are dense and distances are small, where the cost of gas for cars is much higher than here in Canada and therefore cycling makes sense.

The Lonely Planet developed a map of how the climate of different countries would match the provinces and states in North America. As shown below, the climate of Germany and Scandinavia approximates the West coast of the continent where the ocean provides a warming influence. Most of Canada’s climate approximates that of Russia. And Russia, like Canada, is not among the top cycling countries in the world. I would think climate plays a major role; both countries are cold most of the year for comfortable riding. Not that we should not cycle more, especially in urban areas like Ottawa, but our climate limits the seasons for cycling here. Bicycling is a good mode of transportation sometimes, but cannot be relied on all the time in Ottawa.

The other aspect of this proposal is that almost half of the rental units, the affordable units, target women and children, veterans, Algonquins, and indigenous people, and recent immigrants. These people would not be high-income people, therefore needing subsidized housing. But I read in the cycling literature that education and income positively relate to bicycling! I am not sure the proponents of this scheme considered who will be the cyclists in this development. The target group for subsidized housing is not likely in the high education and income groups.

The assumption is that if you have no car (there are only 200 parking spots for 601 units); you walk or bicycle or take public transit. Unfortunately, there is not a plethora of needed services in the vicinity; for example, there is no grocery store nearby. So do you go shopping on your bike with a couple of saddlebags? I do not think so: I just looked out the window and the thermostat registers minus 23 celsius.

The developers may take comfort in that Ottawa, with its hundreds of kilometers of cycling paths, is the number one cycling city in Canada, according to one survey. But providing 600 bicycle parking spots for 601 rental units may be overkill. Unrealistic or overly optimistic. Just my opinion.

Financial benefits for some can lead to business failure for others

December 8, 2022

Do you remember the Canada Emergency Response Benefit (CERB)? People who lost half their income because of Covid received $500 per week from the government. And the payments went on until October 2021. We are not talking about peanuts: the CERB costs $37 billion, benefitting over four million people. After October, half the people who received CERB transitioned to the Canada Recovery Benefit, which pays $300 per week.

We met two of these lucky people receiving CERB in 2020. They were training for a hike out west with heavy backpacks when we met them on a walk to where our cottage is. They stayed at the cottage their family-owned and told us they will use their money from the government to fly out west and hike the Pacific Coast Trail. Working was not the foremost in their minds. They were college students living at home and enjoying the family cottage during the summer.

Is there anything wrong with accepting government money for not working and enjoying life? If these students had to work to attend college, they would have had to take a job, possibly in the hospitality industry, where waiters and waitresses have been in great demand since Covid started. According to government statistics, a third of restaurants closed over the past two years, since Covid started. And these students working may have saved many restaurants from closing due to lack of staff.

An example of this scenario materialized with our visit to Denny’s restaurant. The franchisor and family served the busy breakfast period. They could hardly keep up with the steady line of people coming for breakfast. Our waiter told us nobody who worked there had come back since the government introduced CERB. He said that some previous waitresses told him they wanted to stay home because their income just did not match CERB payments. It was easy to understand why people would not work.

A similar situation played out in Montreal last week when we visited a brasserie on rue St. Paul, in Old Montreal, a historical and very popular place with tourists. I noticed after we were seated that a lineup formed outside where the restaurant people were checking vaccination passports of the visitors. More than half the tables were empty. So I asked the waitress why the people waiting were not let in. She explained she was the only waitress on this floor and they limited the number of people in the restaurant to what the waitresses could serve. I asked why not hire more people. She said that they tried, but nobody wants to work. A similar situation played out again at night when we went for dinner, again, in Old Montreal. One waiter served an entire floor, running his legs off. I have seen no studies linking CERB to restaurant closures. But personal experience shows that giving out government money can lead to people refusing to work when work is available. Is this a moral or ethical issue? Are Canadians becoming soft, looking for an easy life? Is the government encouraging people to stay away from work? Just asking.