Toronto, Canada 2009

216 Pages·2010·4.635 MB·English

by  OECD

OECD Territorial Reviews
TORONTO, CANADA
OECD Territorial Reviews
The Toronto region is one of the chief economic powerhouses of Canada. It generates almost
one-fifth of national GDP and 45% of Ontario’s GDP. The region is home to 40% of Canada’s TORONTO, CANADA
business headquarters and is a main manufacturing hub, with major automotive, biomedical and
electronics companies. Toronto is one of the most diverse metropolitan regions in the world: half of
its population is foreign born and it hosted 40% of all immigrants to Canada during 2001-2006.
Nevertheless, the region’s current economic development model is under pressure and its economic
performance has been mixed in recent years. From 1995 to 2005, GDP per capita and GDP growth
rates were below the Canadian average while its annual economic and labour productivity growth
were lower than the average for OECD metropolitan regions. During this period, population growth
boosted demand in the construction, sales and retail, professional and financial services sectors.
However, the recent decline in the area’s manufacturing jobs has illustrated the structural difficulties
of some traditionally strong areas, such as the automotive and electronics industries.
This Review proposes a new sustainable competitiveness agenda to enhance productivity, focusing
on innovation, cultural diversity and infrastructure, as well as on green policies. To implement such
an agenda, the Review proposes improving the current governance framework by intensifying
strategic planning at the level of the Toronto region.
The Territorial Review of Toronto is integrated into a series of thematic reviews of metropolitan
regions undertaken by the OECD Territorial Development Policy Committee. The overall aim of
these case studies is to draw and disseminate horizontal policy recommendations for national
governments.
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OECD Territorial Reviews
Toronto, Canada
2009
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
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ageing population. The Organisation provides a setting where governments can compare policy
experiences, seek answers to common problems, identify good practice and work to co-ordinate
domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic,
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research on economic, social and environmental issues, as well as the conventions, guidelines and
standards agreed by its members.
This work is published on the responsibility of the Secretary-General of the OECD. The
opinions expressed and arguments employed herein do not necessarily reflect the official
views of the Organisation or of the governments of its member countries.
ISBN 978-92-64-07940-3 (print)
ISBN 978-92-64-07941-0 (PDF)
DOI 10.1787/9789264079410-en
Series: OECD Territorial Reviews
ISSN 1990-0767 (print)
ISSN 1990-0759 (online)
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FOrEwOrD – 3
Foreword
across the OECD, globalisation is increasingly testing the ability of regional economies
to adapt and exploit their competitive edge, even as it offers new opportunities for regional
development. This is leading public authorities to rethink their strategies. Moreover, as a
result of decentralisation, central governments are no longer the sole provider of development
policies. new co-operation between different levels of government is now required in order
to improve public service delivery. The objective of pursuing regional competitiveness and
governance is particularly relevant in metropolitan regions. although they produce the
bulk of national wealth, metropolitan areas often the focus of unemployment and economic
distress and do not always exploit opportunities for growth. Effective policies to enhance their
competitiveness need to address a functional region as a whole and thus call for metropolitan
governance. in 1999, responding to a need to study and disseminate innovative territorial
development strategies and governance in a more systematic way, the OECD created the
Territorial Development Policy Committee (TDPC) and its working Party on Urban areas
(wPUa) as a unique forum for international exchange and debate. The TDPC has developed
a number of activities, including a series of specific case studies on metropolitan regions.
These studies, following a standard methodology and a common conceptual framework,
allow countries to share their experiences, and are intended to help formulate and diffuse
horizontal policy recommendations.
OECD TErriTOrial rEviEws: TOrOnTO, CanaDa – © OECD 2009

aCknOwlEDgEMEnTs – 5
Acknowledgements
This review was elaborated by the Directorate of Public governance and Territorial
Development (gOv) of the OECD, with the support and co-operation of the City of Toronto,
the Province of Ontario, and the government of Canada.
The OECD secretariat would like to thank the Mayor of Toronto, David Miller, as well
as city, provincial and federal officials, including rosanna scotti, Christine raissis, Phil
abrahams, Tobias novogrodsky, randy Mclean, Michael Jacek, anna Pace, Hilda logan,
Peter vidicus, alan Meisner, susan Brown, sue Corke and Michael williams from the City
of Toronto; Bob séguin, Dana richardson, Maurice Bitran, rob glaister, Chris Thompson,
andrew Posluns, Janet gates, Catherine Tramsek, aleksandra wiacek, stellina volpe,
weifang Dong, steve Harlow, John Bullen, Parastoo Hassaszadeh from the Province of
Ontario; and Yazmine laroche, John Forster, guillaume Côté, nicola Bill, alexia Touralias,
karl van kessel and lee weiler of the government of Canada; as well as the numerous other
individuals and organisations that provided valuable inputs and contributions.
special thanks are given to adam Ostry, infrastructure Canada and Chair OECD
working Party on Territorial Policies in Urban areas for his key role in arranging the
commissioning of this review and for his sustained commitment throughout the review
process.
a team of international peer reviewers participated in the review process:
− United states: Mark Drabenstott, founding director of rUPri Center for regional
Competitiveness, University of Missouri-Columbia
− Japan: Yoshinobu Fukasawa, Director for Planning, national and regional Planning
Bureau, Ministry of land, infrastructure, Transport and Tourism
− italy: Marco Magrassi, Urban Policy Coordinator in the Ministry for Economic
Development
The review similarly benefited from the insight of international experts: Professor
gianmarco Ottaviano (Professor of Economics, University of Bologna) and Professor kent
Portney (Professor of Political science, Tufts University, United states).
The OECD Territorial review of Toronto belongs to a series of OECD Territorial
reviews produced by the OECD Division of regional Competitiveness and governance,
directed by Mario Pezzini, Deputy Director of the Directorate of Public governance and
Territorial Development.
This review was coordinated and drafted by Olaf Merk, administrator, under the
supervision of lamia kamal-Chaoui, Head of Urban Development Programme. individual
contributions were provided by Michael g. Donovan, kazuko ishigaki and Javier sanchez-
reaza. statistical support was provided by Daniel sanchez serra. valuable comments were
provided by karen Maguire. sophia katsira prepared the review for publication.
OECD TErriTOrial rEviEws: TOrOnTO, CanaDa – © OECD 2009

TaBlE OF COnTEnTs – 7
Table of contents
Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Assessment and recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Chapter 1. Toronto: facing challenges, grasping opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
1.1. Main demographic, social and economic trends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
1.2. Main challenges and opportunities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Chapter 2. Capitalising on competitive assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
2.1 Fostering productivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
2.2 leveraging cultural diversity for economic competitiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
2.3 Developing sustainable infrastructure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
2.4. Making an innovation agenda sustainable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144
Chapter 3. Improving competitiveness through better governance . . . . . . . . . . . . . . . . . . . . . . . . . 153
3.1 institutional framework in the Toronto region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
3.2 intergovernmental co-ordination in the Toronto region. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
3.3 Financing metropolitan development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
Figures
Figure 1.1 Map of greater Toronto area and greater golden Horseshoe . . . . . . . . . . . . . . . . . . . . . . .38
Figure 1.2 average annual population growth in OECD metropolitan regions (1990-2005). . . . . . . . .39
Figure 1.3 share of foreign-born population in metropolitan regions in the OECD . . . . . . . . . . . . . . .40
Figure 1.4 Economic concentration in OECD countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Figure 1.5 Metropolitan gDP as share of national economy (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Figure 1.6 Economic growth among OECD metropolitan regions (1995-2005) . . . . . . . . . . . . . . . . . .45
Figure 1.7 labour productivity in OECD metropolitan regions (2005). . . . . . . . . . . . . . . . . . . . . . . . .46
Figure 1.8 labour productivity growth in OECD metropolitan regions . . . . . . . . . . . . . . . . . . . . . . . .47
Figure 1.9 Factors behind economic growth in OECD metropolitan regions (2005). . . . . . . . . . . . . . .49
Figure 1.10 Elderly dependency rate in OECD metropolitan regions (2005). . . . . . . . . . . . . . . . . . . . . .50
Figure 1.11 ageing in OECD metropolitan regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Figure 1.12 share of the total working population in OECD metropolitan regions (2005) . . . . . . . . . . .52
Figure 1.13 Unemployment rates in OECD metropolitan regions (2005) . . . . . . . . . . . . . . . . . . . . . . . .53
Figure 1.14 Change in unemployment rates in OECD metropolitan regions. . . . . . . . . . . . . . . . . . . . . .54
Figure 1.15 Higher-education attainment in metropolitan regions in the OECD (2004). . . . . . . . . . . . .55
Figure 1.16 sectoral dynamics in Toronto (2001-2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Figure 1.17 sectoral dynamics in Ontario . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
Figure 1.18 Dynamics of location in Toronto (four-digit industry) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
OECD TErriTOrial rEviEws: TOrOnTO, CanaDa – © OECD 2009
8 – TaBlE OF COnTEnTs
Figure 1.19 location dynamics in Ontario (four-digit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
Figure 1.20 Productivity gap and economic specialisations of Toronto (2001 Census). . . . . . . . . . . . . .64
Figure 1.21 shares of domestic Canadian exports by three leading provinces (1999-2008) . . . . . . . . . .68
Figure 1.22 Traditional innovation indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Figure 1.23 Patent applications per million inhabitants in cities in the OECD (2005). . . . . . . . . . . . . . .71
Figure 1.24 Patent applications in iCT and biotechnology in OECD cities (2005) . . . . . . . . . . . . . . . . .72
Figure 1.25 Entrepreneurship rates in selected OECD metropolitan regions (2001-2006) . . . . . . . . . . .73
Figure 1.26 number of high-quality universities in OECD metropolitan regions (2007) . . . . . . . . . . . .75
Figure 1.27 Private equity in selected OECD metropolitan regions (UsD per capita). . . . . . . . . . . . . . .76
Figure 1.28 Public and business r&D in selected metropolitan regions . . . . . . . . . . . . . . . . . . . . . . . . .77
Figure 1.29 links between higher education institutes and industry in Ontario. . . . . . . . . . . . . . . . . . .78
Figure 1.30 ranking of cultural diversity in Canadian cities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
Figure 1.31 Cultural diversity and city size in Canada. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Figure 1.32 Cultural diversity and earnings in Canadian cities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
Figure 1.33 Cultural diversity and economic growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
Figure 1.34 Educational attainment of immigrants to Toronto. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Figure 1.35 Employment rates of highly skilled foreign-born and non-foreign-born population in
OECD countries (2003-2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Figure 1.36 Employment rates of low-skilled foreign-born and non-foreign-born population in
OECD countries (2003-2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Figure 1.37 shares of foreign-born population in economic sectors in the Toronto region (2006) . . . . .88
Figure 1.38 self-employment rates of selected foreign-born population groups in
the Toronto region (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Figure 1.39 residential concentration indexes in Toronto, Montréal and vancouver (2001). . . . . . . . . .92
Figure 1.40 average commuting time (of all commuters and different commuting modes) in
minutes in OECD metropolitan regions (2005). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
Figure 1.41 air quality in selected metropolitan regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94
Figure 1.42 Public transport and car transport as % of modal split. . . . . . . . . . . . . . . . . . . . . . . . . . . . .95
Figure 1.43 railway capacity in selected OECD metropolitan regions (2003) . . . . . . . . . . . . . . . . . . . .97
Figure 2.1 government transportation spending per capita (EUr, 2006). . . . . . . . . . . . . . . . . . . . . . 132
Figure 2.2 national and sub-national financing of transport (including economic affairs). . . . . . . . . 132
Figure 2.3 Transit spending (CaD per capita) in the greater Toronto area (2007). . . . . . . . . . . . . . .134
Figure 2.4 revenue sources of transit agencies in selected OECD metropolitan areas (2008) . . . . . .140
Figure 3.1 Dominance of core city as against the whole metropolitan area in a selection of
OECD metropolitan areas (2006) (% population). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
Figure 3.2 sub-national expenditures as a share of total government expenditures (%, 2006). . . . . .156
Figure 3.3 state and local expenditure shares in selected federal OECD countries (2006). . . . . . . . . 157
Figure 3.4 Main gross expenditure items in the operating budget of the City of Toronto 2008 (%) . . 158
Figure 3.5 Main gross expenditure items in the operating budget of the Peel region 2007 (%). . . . . 158
Figure 3.6 Main revenue sources, City of Toronto (2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Figure 3.7 Main revenue sources, greater Toronto area (gTa) regions 2008. . . . . . . . . . . . . . . . . . 168
Figure 3.8 Decentralisation and dependence of local governments on property tax
in OECD countries (2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168
Figure 3.9 local government debt as a share of gDP (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Figure 3.10 Property tax rates (in percentages) in the greater Toronto area (2008). . . . . . . . . . . . . . . 173
Figure 3.11 Population density and development charges in the Toronto region (2008-2009). . . . . . . . 178
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