Fraser Institute: Toronto in Decline; Me: Laughs
The Fraser Institute released a report yesterday entitled “Is Toronto in Decline?”, using census data to show that Toronto is losing its competitive edge in the business world and is headed for economic doom. Well, maybe it wasn’t that dire, but it is yet another attack on Toronto and Ontario as bad places for business (remember Jim’s tirades earlier this year?). When I first read this yesterday, I couldn’t help but laugh. Why? Read on.
First, this report was co-authored by Mike Harris. You may remember him (as much as it pains many of us to) as Ontario’s dear (Conservative) leader during the early 90s. He was the one who slashed funding to municipalities, canceled the Eglinton Subway, and downloaded provincial responsibilities to the cities. Oh, he’s the one who had the bright idea of the megacity as well. So for him to come along and berate Toronto is utterly abhorrent. He was the cause of many of Toronto’s ills, which the city is slowly inching its way out of today.
Secondly, the report was released by the Fraser Institute, the west-biased, conservative ‘think’ tank that routinely bashes any progressive policy and worse yet, progressive cities (see: “Unlivable Strategies: The Greater Vancouver Regional District and the Livable Region Strategic Plan”). How much credence should we be giving this type of organization?
The reports main findings are questionable as well, as quoted from their website:
- Torontonians are worried their city is losing its edge compared to other major Canadian business centers.
- The city of Toronto’s median income has sunk below the national average. In the 2001 census, median income in Toronto was 106 percent of the national average; in the 2006 census, it was below the national average at 96 percent.
- Management occupations in Toronto, which may be viewed as a proxy for the city’s health as a business centre, have been on the decline.
- The negative trend is visible not only in Toronto, but also across the province as a whole. Median income in Ontario grewby 10 percent over the period compared to 16 percent nationally. Moreover, Ontario saw a decline in the number of management occupations over the most recent census period.
First, Toronto has been losing its edge, but not nationally, but regionally. Cheap, abundant land and lower business tax rates in the 905 has led to the bleeding of jobs into the surrounding region. However, this is already slowly changing, as Toronto is shifting its tax rates from business onto residential, to maintain competitiveness. The 905, on the other hand, will have no choice as their development charge bonaza ends, to start increasing business taxes, as the residents there already have a significant burden. This will help balance the region, and in turn, attract more jobs into the central city. Note that this is completely separate from the fact that in today’s ‘creative class’ economy, more companies are choosing to locate within the central city to attract young professionals, who are more inclined to demand a downtown working environment.
Secondly is the assertion that Toronto’s median income has dropped below the national average and has increased at a slower rate than cities like Edmonton, Calgary, and Saskatoon. This is true, but the argument that it means Toronto is on decline is absurd. Those three centres are among the fastest growing in the nation and have faced unprecedented growth and inflationary pressures. Home and rental costs are through the roof and labour shortages are becoming a chronic problem. So when the free market is working in this environment, of course wages and salaries are going to increase at a much higher rate than a relatively stable market like Toronto and the GGH. Finally, the GGH continues to take on the greatest proportion of the country’s immigrants, which command lower wages than the general population, causing the median to skew lower than elsewhere as well.
And that’s where the whole report loses its argument. And I wonder: wouldn’t lower costs and more available labour make Toronto more attractive to business? What about the 20 or so universities that line the 401 corridor that churn out thousands of qualified graduates every year might help too? And the fact that Toronto is one of the most diverse, attractive, and exciting cities in the nation? This report ignores all that and focuses solely on the numbers. Toronto is an attractive place to do business. It’s an attractive place to live. I love Edmonton, my hometown, but nothing short of absolute meltdown will make me leave Toronto.
