The Ascendancy of Toronto

[Northern Light]

Ok, I thought we need a thread for those with a positive mindset about Toronto's present and its future.

As per this recent document for Toronto's Board of Trade:

http://bot.com/Content/NavigationMenu/Policy/Scorecard/Scorecard_on_Prosperity_2010_FINAL.pdf

This City ain't doin 1/2 bad!

Now, just because we have a high rate of University Education, a middling rate of unemployment, not unreasonable office rents, low crime and taxes, and healthy City doesn't mean we can't or shouldn't do better.

But I believe we are doing better, on average, the last several years, and are set to do in the future.

Some personal highlights in this regard:

HST - like it or love it, it does improve Ontario's business tax environment
Corporate Tax - Federally and Provincially rates are now at or below most of Europe AND the U.S. and continue to decline
Gov't Debt - too high, but is well below the U.S., much of Europe and JAPAN whose deficits/ debts are 50-200% above our own
Business Property Tax (City imposed and provincial) in decline for the next decade

Real Estate - Still a very strong market, with much under construction and more coming.
Population Growth - very strong, both regional and the City proper (the latter adding 50,000+ residents per year)

Waterfront - Along way to go, but Sugar Beach and Sherbourne Commons are this year. As its new waterfront promenade from Jarvis to Sherbourne

Add to that, the new Queen's Quay (at least 800M of it goes next year), York Quay looks to start next year, Sherbourne Promenade (Front - Queen's Quay is next year), by next year the Leslie Spit will feature a variety of new amenities.

Hospitals: Phenomenal growth in biomedical research and high quality healthcare facilties.

Complete: (last 3 years) St. Mike's expansion, St. Mikes research facility, new TGH wing, Toronto Rehab, New Western Atrium/ER, New Facility in 'burbs in Brampton, Trillium and Scarb. Gen got a new ER too.

Underway: New Sick Kids research facility, Bridgepoint rebuild, CAMH rebuild

Coming soon: New Humber River Regional, East General Redevelopment, New St. Mike's wing

Banks: Very healthy, likely to expand relative to global peers

Universities:

Record donations received in recent years for McMaster, U of T, Ryerson etc.

Recently completed new buildings, almost too numerous to mention

Coming Soon:

Munk Global Affairs School (U of T)
Massive expansion at U of T Scarborough
Expansion of Robarts (U of T)
Expansion of Residences (U of T/st. Mikes)
Ryerson MLG
Ryerson Student Centre
York - new Forensic/and health Sciences buildings

Rumoured:

York U - Medical School
York U - Faculty of Engineering

I'll stop there for now..............

********

This thread is not just for us to pat ourselves on the back though, but to focus on constructive suggestions for how we get our City to the next level of prosperity and success, and maintain and grow the momentum of the last few years.

 

[taal]

Not to rain in on the parade, correct me if I'm wrong but that report you cite is in regards to the entire GTA i.e. when it compares Toronto to other cities - it's not comparing the city proper, it's comparing the CMA / GTA to others.

There in lies the issue ... I'm not overly concerned with the GTA/CMA's competitiveness to other such areas across the world - we're probably doing OK there no matter what anyone says.

What is a concern is Toronto's competitiveness with the rest of the GTA and it's ability to attract / retain new business compared to other areas IN the GTA.
Now, it's possible all other large cities face this similar commercial property tax rate differential but I don't think that's the case.


Examples:
Toronto
TOTAL
Commercial 3.5983042%

Missi
TOTAL
Commercial 2.384381%

Markham
TOTAL
Commercial 2.299651%

Brampton
Commercial 2.711951%

So on average, we're talking about a 1% difference between Toronto and it's nieghbours - it's about 1.5 times greater overall.
Now check this out, a nice summary for 2009:
http://www.city.vaughan.on.ca/images/stories/business/pdf/Comparative%20tax%20rates%20commercial%202009.pdf

The Toronto rate cited there seems higher then the current rate so I'm not sure how accurate it is but it gives you a good idea anyway ... interesting how the Kitchener / Waterloo area has extremely high tax rates ... something seems suspicious above those figures.

It looks like the education component (provincial) can account for about 20/30% of the disparity but rest is Toronto's doing.

Toronto's residetial tax rate is anywhere from .1 to .4% lower.

 

[taal]

fixed.

 

[maestro]

RE: 416 vs 905 (commercial tax rate difference)

Wow, that was faster than I ever expected.

I rather measure the region as a whole than the petty provincialism between the 416 and 905. It's easy to blame the 905 advantage of cheap developable land for Toronto's inner suburban woes however, it has also made the city an economic powerhouse regardless of what percentage of office space occupies Bay Street.

 

[Riverdale Rink Rat]

NL -- nice try.

Taal -- There's a thread for your silliness, called the Decline of Toronto. Go post there, rather than pissing on other people's cornflakes. Seriously, your post is just another in the long line of 'see, we need to cut our taxes' posts which ruin any discussion about anything else to do with municipal affairs.

NL >> I'd say another couple of things which can be added to your list of Toronto advantages is the build out of new office buildings in the core (Telus, Dexia, etc.) as well as the five star hotels drawing more and more high-end tourists/businessmen. How about the long overdue rebuild of New City Hall that will turn it back into one of the great municipal buildings around? The fact we're one of the most multiculti cities anywhere?

Not to mention, of course, Riverdale... ;-)

 

[taal]

irk, I don't think I'm making my point clear enough.

Toronto is a great city - and many good things are happening here - too many to list to be honest. As a concerned citizen, and one who wants to see this city prosper I think there really are some dire issues we need to address - a lot of this here is my attempt to make this issue clear to as many others as possible so hopefully as a group something can be done so our politicians know this is something we *all* want changes. It's hard I admit, the impacts of these policies are long term and it's easy for the current generation to shrug and turn a blind eye - but it's 5/10 years from now where I start to worry.

Business growth is vital to any city - business retention ever more so that is, not losing jobs - if your job 10 years from now moves to the outer 905 are you just as likely to live in Toronto? I'm sure this isn't something you want.

There are a lot of other important issues here and I'm not attempting to hijack the thread - heck I can site many US cities with high density cores (which are growing) which absolutely no sign of life outside the working hours, and even in them for that matter (Houston, is a good example).

Another important thing here is we should consider the outer 416 as well, this has suffered the most from this - while the downtown core may have seen modest growth - but a lot more may have happened, and we may have seen a lot more office towers, if some of these issues didn't exist.

 

[Northern Light]

Thanks Riverdale!

I wholeheartedly agreed with your additions to the list, I just didn't want to make my post too long.

Taal: As Riverdale pointed out, i don't want to get tied up Glen's Doom & Gloom'ism in this thread; notwithstanding that.......

I will point out.....if you refer to this line:

Total tax index 87.8 84.0 on page 53 of the report, that illustrates the Board's estimate of the tax differential between the suburbs and the City proper.

Roughly, total business taxes payable are 4.8% higher in the City, with that number projected to fall every year for the next 10.

This is not an order of magnitude difference.

Remember taxes are not merely the mil rate; but also development charges, assorted fees, the provincial education tax, other servicing requirements, and arguably (not sure if they included this, the water rate)

When one adds all of those in, the difference is now quite small, and getting smaller.

Just sayin.

But let's not waste time debating that.

The point was TORONTO is NOT in DECLINE

It has greater employment growth, construction growth (comm. and res) than the '905' and more importantly is very healthy relative to most other Canadian and Global cities.

The sky is not falling; has not fallen and is not likely to fall anytime soon; those who think otherwise are welcome to go where they think the grass is greener, and call us in 5 years and report on how that worked for them!

The City is healthy, and on a positive trend line. Now we can't be complacent, there is more to do. But nothing to feel bad about either!

 

[Second_in_pie]

But I'm wondering what the problem with jobs appearing in the 905 are. Toronto's downtown is already as vibrant and dense as you could want or reasonably ask for in almost any other American city. Instead of being a 416 vs. 905, why can't we all work together and ensure that the entire region develops into a livable, vibrant, high-density, transit friendly place? This battle between Downtown and the Suburbs is doing nothing. They should instead be working together to coordinate transit and development all throughout the region so that downtown's everywhere.

 

[taal]

Sorry NL, I missed those pages in the report - I do find them rather interesting as the Toronto board of trade is typically quite harsh on the city.

I'm not really sure what the total tax index here is in this particular study - my statement above was merely that the tax rate it self - non withstanding all the other components that factor in here, are considerably higher in the city i.e. 1.5/2 times as much (this includes the provinces share).

 

[taal]

But I'm wondering what the problem with jobs appearing in the 905 are. Toronto's downtown is already as vibrant and dense as you could want or reasonably ask for in almost any other American city. Instead of being a 416 vs. 905, why can't we all work together and ensure that the entire region develops into a livable, vibrant, high-density, transit friendly place? This battle between Downtown and the Suburbs is doing nothing. They should instead be working together to coordinate transit and development all throughout the region so that downtown's everywhere.

This is a very good point - Smitherman hinted to this a while ago in an article ... but I lost a lot of faith in all candidates after watching some debates

One thing I've tried to state is I'm particularly concerned about the outer 416- they have basically seen nill in new office growth - and this isn't an exaggeration - I mean if we consider the 416 fridges if a business can simply relocate on the other side of Steeles (or what not) and save a little on the rent (i'm not sure exactly what it amounts too - businesses pay rent, they don't pay tax for the most part as it's the landlords who do).

 

[kettal]

The costs of rent are set by market demand. More desirable locations will always command higher rents. It's basic economics.

 

[taal]

The costs of rent are set by market demand. More desirable locations will always command higher rents. It's basic economics.

No that's only one factor ... the other being the carrying costs of the landlords - the big one here clearly being taxes - this is typically known as the 'additional' rent a tenant must pay on top of the base rent agreed at contract time.

There's some truth to that statement though ... the rents in downtown will never be close to those of large swaths of partially developed lands in the suburbs - and that's purely market driven.

But the tax portion is quite significant here - particularly in the outer 416!

 

[junctionist]

We're going to have to be aggressive in defending and promoting the city as we improve it. We might pride ourselves as Canadians for modesty but there are plenty of ignorant or snobbish individuals in cities like Montreal or Vancouver and even in the U.S. who have no interest in seeing the ascendancy of Toronto.

 

[Glen]

So for 2 out of twenty years the city has been doing better than its municipal neighbours. Not thriving so much as sucking less. Much of the developments listed in the op are public institutions and do not reflect market confidence. Pointing to the total tax index differences is meaningless if you are a developer of commercial space. The tax that matters most is property tax for the expansion of the assessment base.

The report also misses the point on commuting times. It is not lack of investment in PT that is contributing, it is the displacement of employment rendering PT useless. Employment density has far greater impact on PT utilization than population density.

 

[TrickyRicky]

This thread is about ascendency and Toronto. I think this is a tough topic because Toronto is a city of ascendency and decline depending on who and where we are talking about. The old city of Toronto and some areas of the inner suburbs are in clear ascendency. On the other hand there are middle-class areas in the boroughs that are in decline.

I think in some of these discussions people use numbers and statistics to make points that don't reflect the sense and feel of what goes on on the ground. It may seem as though sense and feel are subjective and inferior forms of argument. But to be honest if you look at most of the really important decision making real people do in the world, it is not based on numbers and the analytical, it is based on feeling.

Similarly, there seems to be a quantity bias in the numbers people use to argue points. What I mean is that people have a bias towards feeling good about large numbers. To illustrate the example I point to an article written about the Bloor/College and Dufferin area in the Toronto Star a few years back where they were wrongly equating population decline in the neighbourhood with an economically struggling area. This is a clear distortion of the reality on the ground which you can feel by being there. The reason the population is declining is because the largest growth in households by far is those making over $100,000 per year. An influx of money generates density reductions. Infact for an area to both grow wealthier and maintain the same density it has to increase the total number of households. This is why a stagnant area in terms of population can have a development boom if it becomes wealthy. Similarly, an area becomes more dense as it gets poorer and as it does so development is stagnant.

On taxes. Taxes matter but they only matter at the margins. What I mean is only people who manage at the margins care about taxation. This is why the wealthy generally don't care about the level of property tax. Similarly I would worry about a company or entrepreneur who puts too much weight on taxation in their decision making process because it shows on the face that they think and manage at the margins instead of from ideas and strategic goals. Most small business owners and middle-class people worry about taxation because they operate at the boundary conditions of their economic means. This is a trap beacuse it is far more effective to think in terms of bigger issues and strategic goals.