The lobby group for Thunder Bay's business community sees some bright spots for the local economy this year, but still expects flat to minimal growth overall.
Chamber of Commerce President Charla Robinson said higher costs for consumers resulting from Ontario's cap and trade program will lead to less disposable income in 2017.
That, in turn, she said, shows why the city "can't keep increasing spending on the backs of taxpayers."
"We're going to see increases in everything across the board, from gasoline to milk, because everything has to be trucked," Robinson said, regarding the impact of cap and trade, during an interview with tbnewswatch.com.
"So residents and businesses both may be less able to be spending."
Robinson also worries about the year ahead for the area's forest industry "as the softwood lumber dispute (with the U.S.) could head up again within the next few months, quite strongly."
Mining and tourism do provide two positives for Thunder Bay's economy, she said.
A new gold mine northwest of Fort Frances is set to begin production this year.
"Moving forward, I believe there will be a fair bit of supplies that will be procured through Thunder Bay firms."
The Chamber is also looking forward to American visitors maintaining the trend that was documented last year, when "our tourism numbers from the U.S. were up ... if the U.S. dollar remains strong, hopefully we'll be able to get some economic benefits from that."
As for City Hall's role in the mitigation of a flat economy, Robinson reiterated the Chamber's position that the city must do more to reduce its overall spending in order to reduce an increasing burden on property-owners.
"We find when folks are feeling a little bit of financial pressure, of course they kind of put a lock on their wallets and they stop spending."
She said businesses respond to that drop in revenue by reducing their own spending, sometimes by reducing hours for staff, which "becomes a real vicious circle."
Robinson said that city budget increases of close to five per cent "don't seem reasonable" in this climate
When asked about the Chamber's concerns on Wednesday, city council's budget chair, Frank Pullia, said that the city "is diligently working" to find savings that can be passed on to the taxpayer and to bring in "a reasonable tax increase."
Pullia said that his ideal definition of reasonable is the inflation rate, which is currently 1.5 to 1.8 per cent.
However, since built-in municipal expenses, led by contracts with city workers, produce a "municipal inflation rate" approaching three per cent, Pullia said "it's going to be a challenge, and we aim to stay below the municipal tax inflation" this year.
He feels it's a longer-range goal to achieve tax increases closer to the national inflation rate.
"It's easy to cut taxes when you cut things," he said. "We want to maintain our level of services in Thunder Bay. That's what makes our quality of life appealing."
