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It’s an attractive place to live and work, but not to invest money, Board of Trade’s 24-city study says
John Spears – Toronto Star
People all over the world think Toronto is a great place to plant roots, but not such a great place to plant money, a new study finds.
Overall, Greater Toronto ranks fourth among 24 world cities in the Toronto Board of Trade’s second annual “scorecard on prosperity”.
It remains an attractive place for people to live, the study discovered, with the odd glaring exception. The biggest pitfall: Toronto commuting times are the worst of 19 cities surveyed, including Los Angeles.
But it doesn’t attract investment to the same degree, ranking 19th as an investment magnet.
“This is where Toronto gets its worst results,” said Carol Wilding, chief executive of the board of trade.
Toronto ranked near the bottom of the heap among 12 North American cities that supplied data on the amount of venture capital raised, and on the value of initial public offerings.
It also ranked low for both productivity and productivity growth against cities from around the globe.
Hong Kong, for example, saw annual productivity increases of 6.6% over a five-year period. Boston, at 3.9%, Stockholm at 3.6% and San Francisco at 3% also scored well.
Toronto scored a puny 0.6%, clustered in the bottom half of the list with other Canadian cities.
At the same time, Toronto ranked No. 2 in “labour attractiveness,” behind only Barcelona.
Part of the proof is that people vote with their feet: Toronto has the highest proportion of immigrants of any city in the study.
As well, it ranks in the upper third of cities in the proportion of people with a university degree. The homicide rate is low and it’s mid-pack in housing affordability.
That’s all good, Wilding said, but it’s not enough.
“The depth of the discrepancy between the two domains cannot be maintained,” she said bluntly. “We either have to lift up on the economic side, or we’re going to risk seeing erosion on our labour attractiveness.”
The study was sponsored by the Certified Management Accountants of Ontario, with research by the Conference Board of Canada.
Last year’s scorecard warned that the City of Toronto risked becoming a bedroom community for the surrounding suburbs, which had far more robust economic growth.
But the recession changed that perspective.
While all of Greater Toronto has suffered, the suburban regions have slowed the most.
For example, the City of Toronto saw its real GDP growth strengthen to 2% this year, compared with 1.2% a year ago.
In the surrounding regions, last year’s sturdy growth of 4.2% slowed this year to 2.9%. (Figures are for a five-year average.)
The report notes that in productivity growth and income “neither Toronto nor its surrounding municipalities have much to cheer about.”
Anne Golden, who heads the Conference Board, said Toronto’s problems may centre on a lack of investment not in people and skills, but in “physical capital.”
“In terms of broad infrastructure, we’re not making those investments,” she said – in both public and private sectors.
Local leadership can make a difference, she said, but ultimately all three levels of government must co-operate in forging policies to attract investment.
Wilding said the Toronto Financial Services Alliance could be a model for future public-private action on the economy.
The alliance has members from all levels of government, the industry and the academic sector working to promote Toronto as a financial centre.