Last month, the governor of Maryland delivered a powerful keynote address about fixing his state’s “lazy” economy. As he put it, their economic engine does not support their ambition. As I step into the role of president and CEO of the Toronto Region Board of Trade, his words stick with me.
Our region also faces a growing chasm between our means and our dreams, battling strong economic headwinds as we strive to compete in a global economy.
We have all the ingredients for success. Toronto is a major technology and financial services hub, a leader in advanced manufacturing, film production, digital media, food processing and consumer products. Our economy is diverse, yet much like Maryland, our current economic engine does not support the ambitions of a world-class city.
It’s time to harness our strengths, to move beyond talking and take action. We have a tremendous amount of untapped economic potential, and it’s time we bet on ourselves and intentionally build a future where businesses and families can thrive.
For decades, Toronto was the fastest-growing city in both Canada and the U.S., growing five times faster than Los Angeles. The GTA’s population has swelled to nearly 7 million, with 750, 000 more people expected in the coming years. While this growth is necessary and welcome, contributing to our rich cultural tapestry and diversifying our workforce, we failed to properly prepare for it.
Now, our once world-renowned livability is hanging in the balance, as demonstrated by our regional housing crisis. Homes are unaffordable and unattainable. As a result, our talented workforce is leaving the city in droves for greener — and more affordable — pastures. Over 60,000 people left Toronto last year, most of whom were millennials with young families. Exactly the demographic you can’t afford to lose amid an ongoing labour shortage.
To deliver more housing, we need both long-term collaborative planning across government and immediate relief, like missing middle housing to densify, but not upend, existing neighborhoods.
For those who’ve stayed, our region rewards them with the third-worst congestion in North America, seventh in the world, with consequences that go beyond inconvenience.
The city is literally and figuratively stuck. The average driver in Toronto lost 118 hours due to congestion in 2022, costing an estimated $11 billion annually in lost output. Our transit network remains underdeveloped, and the combination of poor reliability, aging equipment and safety concerns keeps potential riders in their cars.
This creates a huge barrier to attracting top talent and business investment to the region. Let’s be honest: coming into the city for work is unappealing when it means spending hours in traffic. The cost of doing business goes up when goods and services are delayed.
The good news? We have billions of dollars of transit being built right now.
The bad news? We’re still years away from it being operational. We need to maximize the systems we have by implementing more frequent service and enhancing the reliability to get people out of their cars and onto public transit.
Beyond these livability challenges also lies the productivity gap.
Our region’s population growth has far outpaced our economic growth, with significant consequences.
When it comes to GDP per capita, the Toronto Region is not only behind other major cities like San Francisco or New York City but lagging when compared to midtier cities like Detroit or Cleveland. The Toronto region’s GDP per worker is $113,000 per year. That’s $72,000 per worker less than peer U.S. cities.
If we are to sustain and enhance quality of life, we must invest in making our economy more productive.
This means embracing new technologies and innovation in our existing sectors, while preparing to support emerging industries or risk losing our foothold in expanding global markets. Toronto was once a region brimming with innovation. Today, we are surprisingly slow to adopt advanced technologies and are behind our OECD peers in embracing automation or AI.
The productivity gap is real — from an economic standpoint, we are falling behind. But potential solutions sit right in front of us. We must choose to implement bold policy that addresses these livability challenges, or we can continue allowing ourselves to be passively dragged. The choice is ours. Let’s choose to win.