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.


Ryan Bennett

Ryan Bennett

Securities Analyst, Real Estate

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.

Our assessment

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.


Sign up to Global Cities now
 to get the latest news and views, including future updates to the Index


  1. OECD: Territorial Reviews; Toronto, Canada, 2014
  2. Toronto Financial Services Alliance, 2015
  3. 'The busiest highway in North America', Oppositelock, 2014

Important Information: The views and opinions contained herein are those of Schroders' Global Cities Team, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This material is intended to be for information purposes only and is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Schroders does not warrant its completeness or accuracy. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Schroders has to its customers under any regulatory system. The data provider and issuer of the document shall have no liability in connection with the third party data. The Prospectus and/or contains additional disclaimers which apply to third party data. Regions/sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. The opinions in this document include some forecasted views. We believe we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know. However, there is no guarantee than any forecasts or opinions will be realised. These views and opinions may change. To the extent that you are in North America, this content is issued by Schroder Investment Management North America Inc., an indirect wholly owned subsidiary of Schroders plc and SEC registered adviser providing asset management products and services to clients in the US and Canada. For all other users, this content is issued by Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Registered No. 1893220 England. Authorised and regulated by the Financial Conduct Authority.