City in focus
Four ways talented Toronto is a leading urban economy
Sitting at number 18 in the index, Toronto is the highest ranked Canadian city. Here we take a look at some of the factors influencing supply and demand.
City: Toronto, Canada
Index ranking: 18
Share of national economy: 20%1
- Toronto is the heart of the Canadian economy, as its largest city by population and GDP
- It’s the third largest technology hub in North America
- Infrastructure has failed to keep pace with a growing population – major roads are highly congested
Why Toronto is a Global City
Toronto’s technology sector employs more than 168,000 people working at over 15,000 companies that generate over $50 billion of revenue, making it the third largest technology hub in North America. How did this city achieve this? It’s a similar story to Boston’s as it is largely a result of being close to talent.
Toronto is indeed a city brimming with talent – according to the City of Toronto, over 143,000 of its residents have a degree in science, technology, engineering, and/or mathematics.
The free movement of people
Canada’s “open door” immigration policy is a huge benefit for companies hiring and able to choose from a multicultural pool of talent. Thanks to this pro-immigration stance, over 30% of Toronto residents speak a language other than English and French - another positive for employers.
While the tech scene has helped to reinvigorate the city, Toronto remains a city of finance, which accounts for over 60% of employment as all of Canada’s major banks are headquartered there2.
Is infrastructure struggling to keep pace?
These thriving sectors go a long way towards boosting the need for more housing in the centre of Toronto as more millennial workers desire to live and work in urban environments.
However, more must be done with the city’s infrastructure which is struggling under the weight of the increasing population. While the city has been diligent with public transport upgrade in the city over the last 10 years, the highway system around the area has not improved enough to handle the additional capacity needed - much to the chagrin of one (rather vocal) Uber driver.
As a result, the 401 highway around Toronto is the most congested in North America3, which is saying something given the traffic in Los Angeles. This has made suburban living and commuting downtown arduous and has created demand for multi-family development - which has come in droves.
The number of privately owned homes in Toronto has climbed 35% over the past year and multi-family development accounts for roughly 70% of new homes. This is far higher than the 25-year average of 55%, showing more of a willingness of tenants to live in the downtown urban environment - avoiding a long commute.
There is a clear urbanisation trend in Toronto, which companies can cash in on by acquiring and accumulating parcels of land adjacent to one another to create a unique neighbourhood experience, drive interest and over time, charge higher rents.
A cash injection of over $500 million of projects is due into the Toronto urban core through one company alone. With strong secular trends, it’s hard to see anything but significant value creation on the horizon.
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