In its Scorecard on Prosperity – 2010, Board of Trade’s study ‘Toronto as a Global City’ continues its examination of Toronto’s economic development, benchmarking Toronto against 23 other great metropolitan areas around the world.
Founded in 1845, the Toronto Board of Trade is Canada’s largest local chamber of commerce, representing 10,000 members. It connects more than 200,000 business professionals and influencers throughout the Toronto region. BoT plays a vital role in elevating the quality of life and global competitiveness of Canada’s largest urban centre.
The board updated data and included new indicators, allowing it to offer an enhanced picture of Toronto’s performance, including a new analysis of Toronto’s relative attractiveness for capital investment. In this way, providing a more comprehensive picture of how Toronto is doing compared to other world-class cities around the globe. The study used a scorecard of 34 indicators grouped into two domains of Economy and Labour Attractiveness. Overall, Toronto ranked 4th, which is the same as last year.
In my opinion, considering the high net migration into the Greater Toronto Area each year, resulting mainly from immigration, we could have done far better as a city. How can a city attract the world’s best and brightest people and still produce only average economic results? Well, the answer is simple. The world’s best and brightest people are not put to their highest and best use. Qualified professionals are prevented from entering into their professions and forced to drive taxis or work in call centres to support themselves and their families. Only a handful have enough resources or piggy back on their relatives for sustenance, while they struggle full time for years to get a mere foot hold in their profession. After such long struggle, most of this already small group, loose the drive, relevance and creativity that they brought over with them. No wonder Toronto’s poor performance in innovation and productivity growth is troubling, even though these two forces are the major drivers of future prosperity.
The Scorecard on Prosperity introduces the “Capital Lens”: a combination of eight of the Economy domain indicators most closely linked to capital attractiveness (including productivity, venture capital and office rents). The purpose of the capital lens is as an indicator of a metropolitan area’s capacity to attract capital investment — a key determinant of economic prosperity. Despite Toronto’s relative affordability as a place to do business, it falls short when it comes to attracting significant capital investment. Boston ranks first in this category based on outstanding levels of venture capital investment, boosted by the availability of affordable office rents that are better than Toronto’s and a reasonable tax burden.
Toronto has proven itself an attractive place to live, drawing in enough well-educated, skilled newcomers to keep it near the top of the labour attractiveness domain. Toronto leads the pack in its share of high-tech and professional workers and remains competitive in its share of the population with university degrees. Within an easy day’s drive of the populous North-eastern and Midwestern US, Toronto has the market size to generate good investment opportunities and sustain solid productivity growth. With its relatively low business taxes and office rents, Toronto is affordable on the global stage as well.
Toronto is number 10 on the list for Gross Domestic Product (GDP) - $42,538, with Paris leading the pack in GDP category - $79,681. In GDP growth, we rank 14th. Five-year average annual percentage growth in total employment puts Toronto’s five-year average of 2% at 7th place, ahead of every US metro area.
Residential building permit growth indicates the rate of investment activity in the residential sector. As an important sector of the economy, housing is a proxy for confidence in the growth of the metro region. The percentage increase in the number of residential building permits is calculated for the five-year period from 2003–08. Toronto, which had negative growth (-0.9%) in the five-year period, is placed 9th, behind Seattle (1), Montreal (3), Vancouver (4) and Calgary (8). Perhaps building more houses would have met the demand for housing and thus controlled the upward spiral of prices in Toronto’s real estate market.
Toronto’s most pronounced weakness is its lengthy commuting time. Citing under-investment in transit as one of the reasons, the Organisation for Economic Cooperation and Development (OECD) warned in a recent report that congestion in Toronto is costing the Canadian economy over $5 billion a year. A personal observation: Diversity brings diverse driving habits. The commute time problem is compounded by lack of enforcing progressive driving habits. To make our roads safer, the only way known to Greater Toronto’s traffic policy makers and traffic enforcement agencies seems to be reducing speed. This only adds to the commute times. The focus should be on sharing the road and making traffic efficient.
Overall, Toronto is a world class city and a great place to live or invest in. After Montreal, Toronto’s crime rate is lowest in North America (measured by average number of homicides per 100,000 people). It is economically, socially and culturally vibrant. The city fosters an environment conducive to promote powerful collaborations among businesses, government, technology leaders and community builders. Globally, Toronto plays a vital role in elevating the quality of life and global competitiveness of Canada.