STAFF REPORT
March 2, 2000
To: Economic Development and Parks Committee
From: Joe Halstead, Commissioner Economic Development, Culture and Tourism
Subject: Toronto Competes: An Assessment of Toronto's Global Competitiveness
All Wards
Purpose:
This report summarizes some of the key findings of Toronto Competes: An Assessment of Toronto's Global
Competitiveness, and outlines the steps to completion of the City's Economic Development Strategy
Financial Implications:
There are no financial implications resulting in the adoption of this report.
Recommendations:
It is recommended that:
this report be received for information.
Background:
In October 1998, City Council directed the Commissioner of Economic Development, Culture and Tourism to prepare an
Economic Development Strategy for the City. Council also established a Steering Committee, with representation from
business and labour as well as City
Councillors and senior City staff, to oversee the process of developing the strategy. The Steering Committee members are:
Councillor Brian Ashton (Chair), Councillors Raymond Cho, Rob Davis, and Mario Giansante, Ted Mallett (Canadian
Federation of Independent Business), Bruce McKelvey (Toronto Board of Trade), Trish Stovel (Metro Labour Education
Council), and Larry
Tannenbaum (Kilmer Van Nostrand Inc.), and senior City staff Mike Garrett, Joe Halstead and Brenda Librecz.
The initial consultations with the City's business community conducted by Economic Development Division staff indicated
the need to develop a better understanding of the Toronto economy and our competitive position relative to other
international cities. These consultations also indicated the need to better align policies and actions within and among all
levels of government and with the private sector. Funding for a competitiveness study was included in the Economic
Development Division's 1999 budget. To ensure the analysis was integrated with and informed evolving Official Plan
policies and provincial policy initiatives, Economic Development Division staff invited the participation of Urban
Development and Planning Services Department - City Planning, and the Ontario Ministry of Economic Development and
Trade - Urban Economic Development Unit. Economic Development staff have also consulted with federal government
officials on an ongoing basis.
To get a fresh, independent and objective perspective on Toronto's global competitive position, an international team of
consultants, led by ICF Consulting (an internationally recognized firm specializing in economic strategies) and
complemented by Toronto based firms Metropole Consultants, GHK International, WEFA Inc. and Professor Meric Gertler
(University of Toronto), was engaged to undertake the assessment. The primary objectives of the study were to provide:
an overview of the Toronto/GTA economy, particularly its role in the global economy and its economic competitiveness;
and
a brief analysis of the major industry clusters operating in the region.
The study specifically looked at export industry clusters because exports bring new wealth into the City. This new wealth is
then circulated among local businesses and their employees through purchases and wages (i.e. supplier networks, retail
shopping, entertainment and other amenities such as restaurants, theatres, etc.). Thus strong export clusters help build a
strong local economy.
The ten clusters assessed and benchmarked in the study against Toronto's major competitor city regions are: Aerospace,
Apparel & Fashion, Automotive, Biomedical and Biotechnology, Business and Professional Services, Financial Services,
Food and Beverages, Information Technology and Telecommunications, Media, and Tourism. Recognizing the broad
economic context in which Toronto businesses operate, the study purposefully assessed these clusters at both the City and
Census Metropolitan Area (CMA - roughly equivalent to the GTA) level.
At its meeting on November 29, 1999, Economic Development and Parks Committee considered a staff report and
presentation on the Economic Competitiveness Study, which at the time was substantially complete, and endorsed the
study as the basis for the City's Economic Development
Strategy. The final report, Toronto Competes: An Assessment of Toronto's Global Competitiveness, is now complete and
has been distributed to Councillors, other Departments,
Agencies, Boards and Commissions, senior federal and provincial officials, media, and other interested parties.
Comments:
"Toronto Competes: An Assessment of Toronto's Global Competitiveness" is the result of an extensive review of
international data and research materials and benefits greatly from the input obtained through broad based consultation
with the business, labour, and academic communities over the past year. The key messages of summarized in the Overview
booklet and in the Executive Summary of the main report. Perhaps the most important message is that Toronto is going
through a profound economic transformation.
In most recent economic cycles the number of industries and jobs declined during periods of recession, then later expanded
in much the same form as economic conditions improved. This last cycle has been very different. Trade liberalization, the
formation of multinational trading blocks and the rapid advancement and dissemination of telecommunications technology
providing the ability to transfer information and capital almost instantaneously to virtually any destination has lead to a
wholesale restructuring of the global economy. Toronto has been one of the cities at the forefront of this global transition.
Implementation of the Free Trade Agreement (1989), North American Free Trade Agreement (1993) and the formation of
the European Union have changed the nature and scale of competition. Our focus has shifted from trading in protected, but
limited, Canadian markets to the unprotected and unlimited international arena. Our focus has also shifted from routine
mass production manufacturing to innovative, higher value added products and services.
The new knowledge-based economy is driven by innovation, creativity and entrepreneurship - i.e. the knowledge, skills and
abilities of the people who live in a community. The jobs being created in the new economy are not just the old jobs being
restaffed - they are different. As the report notes, "The growth areas in the City now are activities that leverage, and link to,
the City's research, educational, and cultural institutions and communities, to produce innovative and specialized products
and services. This is true across all clusters".
Economic competitiveness is not solely about being the low cost provider. "Toronto Competes" recognizes the vitality of
the City's neighbourhoods, its diverse population, rich arts and culture
spirit, and core of knowledge-based institutions, as key resources that contribute to our quality of life and are essential to
our economic competitiveness. Just as consumers critically assess the quality of products and services before making
purchases, today more than ever businesses evaluate the quality of life within a community before making an investment.
The report emphasizes the importance of strong economic foundations - human resources, research & development,
finance, infrastructure, business climate, and quality of life - to competitiveness .
The report indicates that Toronto is well positioned for success in the new economy. Toronto is a knowledge centre. We
have the critical mass of creative people and the concentration of cultural and educational institutions, community colleges
and universities, hospitals and research facilities, necessary for innovation to occur and new products and services to be
created. As illustrated in the Overview booklet, over 50% of Toronto's labour force have a university degree or community
college diploma well ahead of major metropolitan areas in the United States.
Success is not guaranteed however. While Toronto is not a city in decline, it is a city at risk. As the most highly urbanized
area within the region, the City of Toronto must address a number of unique and costly challenges - aging infrastructure, a
work force in transition, a higher proportion of low income households, older industrial areas that require rehabilitation,
decentralization of clusters, diminishing share of GTA investment as well as population and employment, and property tax
imbalances. The report indicates that a number of the challenges the City faces have been exacerbated by the actions or
policies of upper tier governments reducing their budget deficits. Toronto requires additional public investment, private
investment, and public-private partnership investment.
Conclusions:
As stated in our April 1999 Business Perspectives report, Toronto is at a critical juncture in its evolution. The City is going
through a profound economic transformation, similar in degree to the shift to the industrial age but occurring much more
rapidly. The independent assessment of an international team of consultants indicates that Toronto is one of, if not the best
positioned city in North America to compete in the global economy of the 21st century. However, the consultant team also
advises that, cities cannot achieve economic competitiveness by themselves, the economic foundations required for success
cannot be created by any one organization or agency. The costs of 'go it alone' programs are increasingly prohibitive.
Achieving our full potential and creating a 'vital cycle' of economic competitiveness and improved quality of life requires
strong partnerships between all levels of government, business, labour, institutions, and communities.
The consultations undertaken by Economic Development Division staff, as part of the preparation of the "Toronto
Competes" report and of the broader Economic Development Strategy, of which Toronto Competes is an important
component, give us reason for great optimism. Public and private sector, labour and institutional stakeholders have
indicated a willingness to partner with the City.
The Economic Development Strategy will build on both the analyses, feedback received and the goodwill generated
through "Toronto Competes". A draft of the strategy is being is being finalized and a workshop for Committee members
and interested Councillors is being arranged for early April. Input will also be sought from a broad cross-section of Toronto
businesses, labour representatives, and educators as well as other City Departments in finalizing the Economic
Development Strategy.
Contact:
Brenda Librecz,
Managing Director, Economic Development
tel. 397-4700;
fax. 395-0388
blibrecz@toronto.ca
Joe Halstead
Commissioner Economic Development, Culture and Tourism
