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Canadian Urbanism Uncovered

Thursday’s headlines

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T.O. debt balloons $497M in 2007 [ Toronto Star ]
Parks and wrecks [ NOW magazine ]
Declining debate [ Eye Weekly ]

Bombardier appears to lead TTC streetcar bidding [ ]
When it comes to transit contracts, we’ve been around this track before [ Globe and Mail ]

Police beefing up patrols in Regent Park [ Toronto Sun ]
Residents kick up big stink [ National Post ]
Mississauga bucks trend with new digs [ National Post ]
Neighbours fight soccer field dome [ National Post ]
Harbouring discontent [ NOW magazine ]

Toronto tour bust [ NOW magazine ]
Who’s watching our tour guides? [ NOW magazine ]


  1. Matthew, did the Eye Weekly article misquote you?

    “Matthew Blackett, founder of Spacing magazine, is critical of the report, deeming the findings “fundamentally wrong.” By analyzing cities by borders as opposed to regions, Blackett maintains, it ignores both business and housing opportunities in the sub-regions of Peel and Vaughan that complement Toronto. Commuters who live in Mississauga and York region and who work managerial jobs in Toronto aren’t represented either, disregarding the fact that property taxes in those places are “quite low” for residents, high for businesses.”

    Besides the mistake about the property tax being low for residents and high for businesses in the 905, your other remarks are, IMO, wrong.

    More people from the 416 work in the 905 than the other way around. So any omission in the census data would hide an even uglier truth than that portrayed by the numbers.

    Furthermore by suggesting that a regional viewpoint is more relevant, ignores what the original article was pointing out. Toronto is the sick man of the GTA.

  2. Yes, there is a mistake as I would never had said that property taxes in Peel, etc are low and biz high. I know its vice versa.

    But I believe that comparing Toronto, which is well entrenched and established and has little room to add the types of jobs the Fraser Inst wants, to Mississauga or Peel, which has a lot of room to add manufacturing jobs etc, is flawed. More poeple from 416 work in the 905 becuz there are twice as many people in the 416 than than the 905 (at least int he immediate surroundings). Picking that number is misleading. What’s the percentage? That would be more accurate. I think regional analysis is a better way to gauge the health of cities. We don’t operate in isolation.

    That being said, I’m not a business analyst, so my opinions should be taken with a grain of salt. But I don’t believe we are the sick man of the GTA (maybe a slight cold) and that this report is very selective in how it chooses to represent its facts. Over the last year, City Hall has done more American-style taxation reform that you would think the Fraser Institute would like to see.

    I know Glen is passionate about this topic, but we see things a little differently.

  3. Glen, where does your claim that “more people from the 416 work in the 905 than the other way around” come from?

    According to a Statistics Canada report, as of 2001 there were 179,950 core-to-suburbs (416 to 905) commuters in the Toronto CMA, while almost double that number, 331,065 commuted suburbs-to-core (905 to 416).

    To me, the graphs in the Fraser Institute report are far more worrying at the regional level than at the municipal level. Just compare the “Toronto” (416) and “Toronto CMA” (416+905) bars to the other cities: the 905 isn’t faring much better except in a few specific areas. The business/finance/administration area is interesting — but I wonder what’s replacing those jobs? A chart for “science and research” jobs might show the opposite trend, reflecting MaRS and the downtown research cluster. Forgive me for thinking the Fraser Institute might not be supplying the whole picture.

  4. Matthew,

    I could take you on a drive through many of Toronto’s industrial areas and you would be shocked to see how sorry they look. The majority of them are either for lease, places of worship, or used car dealerships. While this decline was happening in these area, huge industrial areas in Vaughn, Mississauga etc. were built. So while the 905 ares did have room to grow, much of that growth came from, or should have occurred, in Toronto.

    What is even more surprising is that industrial / commercial land (with or without buildings) are much cheaper in Toronto. About 50% less for comparable properties. Of course this is a result of Toronto’s tax rate being twice as much.

    The decay has also happened in the office sector. Between 1986 and 2001 Toronto lost 35 head offices, while the 905 region gained 30. Before anyone comes in and points to the two new office towers being built in the core, please keep in mind that a focus on such properties might skew the picture. There are many types of firms that must locate in the core. It is necessary for them to be near city hall, Queens Park, U of T, the Hospitals or financial markets. Look beyond those ‘attached’ firms and towards those that are ‘footloose’, whom have more discretion in choosing locations. They have voted with there feet and left.

    While I agree that this last year has seen more action on this issue than the past twenty. It is only because of the dire straits they city finds itself in. Like Vancouver each new resident to the city must be subsidised by either the province or non the residential tax base. The first kick at the can (2005 Enhancing Toronto’s Business Climate) proved to be woefully inadequate.

    What Toronto needs, IMO, is a five year plan to reach parity in tax rates to the 905 region for ICI properties.

    BTW when the new residential assessments come in you are going to see first hand how homeostasis works in capital markets. By having a fixed ratio between classes the divergent appreciation the residential class is going to see very large tax increases in the near future. This reality might also be what is fueling the city’s new found urgency in this area.

  5. Matt,

    My stats might be opportunistic as they relied on a modified GTA definition. The Toronto CMA is smaller than the GTA. IIRC the stat came from a report done on comparing employment areas within the GTA. As such, it focused on the areas immediately surrounding the 416 proper. I will see if I can dig up my source on this and give you the link.

  6. One more thing Matt,

    The Toronto CMA stats include Toronto. So graphs like that of figure 3 would show a net gain, as opposed to a loss, for the CMA if Toronto was excluded form the figures.

  7. Glen, I realize Toronto CMA covers both. But Figure 1’s median income — which seems like the broadest measure — doesn’t show much of a difference either way. I just don’t think this data supports a criticism of City of Toronto tax policy. The Fraser report says itself, “The analysis presented in this paper will show that worrying trends are affecting not just Toronto, but the larger Toronto area as well.”

    I forgot to mention John Barber’s critcism of the report, that census data reflects where people live, not where they work. So figures 1-6 have to be read in the context of City of Toronto _residents_ working less in business, finance, etc. Such a trend could exist even with ten new bank towers having gone up in the city’s core, if the jobs were filled by GO commuters living in Oakville.

    And I’m not sold on your latest stat: industrial/commercial land costing 50% less in Toronto than the burbs. According to the latest Colliers report, East York has the region’s highest average sale price for industrial land, and the 416 as a whole is in the middle of the sale-price pack. Average rental rates are lower, but a 4.4% total availability rate — lowest in the GTA — doesn’t make the situation for Toronto’s industrial lands sound so grim.

    And although I agree that homeowners need to bear more of the municipal tax burden, there are plenty of stats that show Toronto is, on a global scale, a low-cost place to do business. Knocking down business taxes so we can, e.g., attract manufacturing that might otherwise set up in South Carolina seems like a continuation of the strategy that got Ontario into its current economic state. Toronto has to do more to attract higher-quality employers (like SAS, who shunned the suburbs to set up shop on King Street East) and diversify across sectors. I’m not convinced municipal tax levels are make-or-break for those businesses.

    Mike Harris ran for office on the pledge that the province needed a simple, “common sense” approach. I think things were a lot more complex than that back then, and they still are now.

  8. Matt,

    I understand what you are saying but respectfully disagree. The figures I submit that we should be concerned about are to do with total number of jobs. The median income figures are irrelevant to to Toronto’s job creation (sic) record. It may also explain why non English speaking immigrants have a harder time finding employment in Toronto compared to the rest of the GTA.

    I also disagree with the city positioning itself to pick what types of industries to attract. Governments that try to pick winners and losers usually choose the latter. Pointing to SAS while ignoring the loss of Oracle, Canon etc. is not productive. The city’s push into supporting the film industry may also prove to be futile with or dollar so high.

    As far as the Colliers data goes, East york provides such a small sample that it cannot be relied upon. There are a number of non residential properties that sell for inflated prices on speculation or condition that they are rezoned into residential. It also ignores the customary fundamentals that the closer to a central location the higher the value. Non residential properties should cost more in Toronto that in New Market. Just like they should cost more in the GTA than in Timmins. That is not the case though. I have looked up a number of industrial properties to see if Toronto’s values were depressed. This, following some correspondence with Dr. McDonald (see ). As his findings predict, Toronto’s higher taxes get capitalized into values. You can also see proof of this in historical land appreciation values; page 12 of, titled ABSOLUTE CHANGE IN INDUSTRIAL LAND VALUES. Industrial properties make for good comparisons as they are free from intangibles and rely heavily on cap rates for determining value.

  9. If you want to do some interesting comparisons give this a try. Go to and compare properties. I did a comparison of industrial properties in Toronto vs. Vaughan between 25,000 and 50,000 sq ft. The first three of each city worked out to $60, 39, 55 per sq ft (building) for Toronto, $117, 134, 111 per sq foot in Vaughan. If you average in land areas the picture gets far worse.

  10. Glen, we’re going to have to agree to disagree.

    BTW, I’m certainly not suggesting the city hand-pick specific companies. But I think city policies do tend, conciously or otherwise, to favour some types of business over others. There are undoubtedly businesses for whom tax rates are a leading factor in where they locate, and others for whom other elements — some funded out of the tax base — would be more important. If you assume tax rates are the most pressing issue, you’re (indirectly) picking certain types of industries to attract.

    I’ll leave the rest to more informed commenters, like this one.

  11. Matt,

    Conversely, if you assume tax rates are not relevant and have commercial rates that are very high, that in itself is a choice. More so than choosing a more balanced tax burden as it, the current unbalanced scheme, is exclusionary to those types of industries that are sensitive to cost. The more balanced system is not.

    As far as Stanford`s opinion. Pointing to Richard Florida`s, “Ra-Ra-Sis-Boom-Bah! -we are creative“ banter as proof of anything makes it impossible to take anything else seriously. The piece is full of omissions and errors.