Highlights from the CUR Seminar: “Hyper-Concentration of GTA Job Growth in Downtown Toronto: What Does It Mean for the 905 Regions?”
By: Diana Petramala
February 22, 2019
The Centre for Urban Research and Land Development (CUR) and the Local Economic Development Certificate Program at the G. Raymond Chang School of Continuing Education at Ryerson University hosted a seminar on February 7th titled “Hyper-Concentration of GTA Job Growth in Downtown Toronto: What Does It Mean for the 905 Regions?” Further information and a video of the seminar can be found at the CUR website at the link below.
A recent Neptis Foundation Report titled, “Planning for the Next GGH” was the inspiration behind the latest CUR event. The author of the report, Dr. Pamela Blais, along with the Directors of Economic Development / Strategy for Halton (John Davidson), Durham (Simon Gill) and York (Doug Lindeblom) came together to discuss future employment prospects across the Greater Toronto Area (“GTA”) and the implications of the Blais findings for land-use planning in their respective regions.
Here are some of the key takeaways:
Technological advances and skill development are changing the type and location of jobs across the GTA
The thrust of the Neptis Report, and of Dr. Blais’ presentation, was that employment in the Greater Golden Horseshoe (“GGH”) is shifting from that of a predominately manufacturing economy to that of a more knowledge-based economy. Automation is also replacing many lower-skilled jobs. While declining, manufacturing jobs still account for the greatest share of jobs in the region, but the share of high-skilled jobs have been growing faster than manufacturing since 2006. Manufacturing jobs declined by 103,000 between 2006 and 2016, while jobs in finance rose by 47,000, and those in soft technology rose by 19,000 during the same period.
The implication, according to the Neptis Report, is that regions with a high concentration of low skilled and manufacturing jobs, mostly in the outer suburbs, are seeing little growth in employment, and even out right contractions. These areas are more vulnerable to future employment losses. Meanwhile, job creation is occurring in small pockets in the City of Toronto, especially in downtown Toronto. There were over 75,000 core jobs (those that are tied to trade rather than population) created in the GGH between 2006 and 2016. Roughly 67,000 of those jobs were created in downtown Toronto.
The Neptis report suggests that planning frameworks need to account for these changes and shifts.
There is more need for data and on-going analysis regarding employment in the GTA.
The thrust of the Neptis Report is that future land-use planning should be data-driven and forward looking, but we still don’t have the right type of data to do this.
The Neptis Report represents a good start at building data-driven research to guide land-use planning policy. Its analysis is a synopsis of how the employment landscape has changed in the region. However, a forecast of future employment growth is still needed to identify the nature of future job creation. In order for the planning system to be “anticipatory” and “flexible” in responding to shifts in the business landscape, we require more data and analysis.
There was some agreement during the CUR session that the types of jobs available across the region are changing, however panelists disagreed on how each 905 region was performing. Mr. Gill and Mr. Lindeblom pointed out that while Durham and York were not necessarily seeing the same employment growth as the City of Toronto, their regions have seem steady employment growth of 3% to 7% in the last two years. In addition, Mr. Davidson noted that Milton is growing exponentially. Mr. Lindeblom noted that the vacancy rates for office and industrial space are low in York, which would indicate a strong demand for employment space.
Indeed, all the panelists agreed that the report relied on information now almost three years old as a lot could have changed in the period since then. Everyone on the panel would have liked to have seen better, timelier data.
Each municipality in the GTA conducts their own employment counts through surveys. However, a recent CUR report noted that the methodologies used varies by region and over time. Therefore, the data is not comparable. CUR’s report argued that the individual employment surveys conducted by the municipalities in the GTA should be done on a consistent, regional basis.
Toronto’s boom might be speculative, while the suburbs are still highly competitive
The panelists touched on other areas that need more thought and consideration. Mr. Davidson noted that there is still a big question around whether the office boom in Toronto is cyclical or structural, a theme that needs to be further investigated.
There also needs to be a discussion around how demographics change employment patterns. Jobs follow talent. The downtown has been attractive to employers because it houses many Millennials, but will these employers follow Millennials to the suburbs as they age and look for more affordable, family friendlier housing? New immigrants to Canada have also traditionally flocked to urban centers, but are now increasingly moving into the suburbs. Some of these trends have already been seen in other major North American cities, where some urban cores having already peaked and the suburbs are making a comeback.
Mr. Gill noted that investment influences where employment space gets built and where businesses go. Toronto as a market is attractive to investors, so more building on speculation tends to occur in the downtown core, which offers more room for businesses. From a long-term perspective though, the 905 regions offer more competitive real estate prices. The cost of land and rents are lower. As the cost differential between downtown Toronto and the suburbs widens, there should eventually be some shift back to the suburbs.
A coordinated regional land use plan and economic development strategy would help improve planning and economic outcomes
Dr. Blais presented the view that a second downtown as an option could take some of the growth pressures off of the downtown core. If these trends of the hyper-concentration of employment continue, she argued, downtown Toronto could start to experience negative externalities such as congestion, air pollution, wealth inequality, and high home prices (too late!). As such, a second downtown somewhere in the 905 area where transit linkages are available could alleviate some of this pressure.
The other three panelists all seemed to agree that each region have growing urban centres which require urban amenities (including transit), but not necessarily that growth needed to be directed to just one specific downtown area. Each area is diverse, they pointed out, and planning for growth across the already designated urban centers would allow for more diversity in job creation across the region.
They all noted that there were synergies to be had from working together, alluding to Toronto Global, an organization set up and funded by all the municipalities across the region to help promote the region and attract foreign business investment.
The other important angle to regional planning is the need to coordinate land-use, through a regional economic development strategy and transit planning.
A more comprehensive regional transit plan is needed
This was perhaps the one area where all three panelists agreed the strongest – the GTA needs a more encompassing regional transit plan to connect all sizable urban growth nodes. Right now, you can only reach regional growing urban centers by going through Union Station in downtown Toronto.
Many areas with a concentration of higher-skilled jobs have one thing in common – good access to transit. Dr. Blais noted that businesses like to have access to the regional labour force, and the best way to provide access to it is to increase transit and reduce commute distances. Better transit options to connect all parts of the larger region would help reduce transit costs and commute times, making employment areas outside of the downtown core more attractive to both employers and employees.
In particular, Mr. Lindeblom noted that we need more east/west transit lines, including along the QEW, 407 and 403. The region can start with rapid bus lines before slowly adding light rail.
Getting the next big trend right might be hard, but the GTA can plan for a mix of uses
The Neptis report calls for urban planners to do a better job at planning for the types of jobs that could be attracted to the GTA. Mr. Lindeblom cautioned that planning based on employment forecasts may actually mean you can miss the next big trend in jobs. The Neptis solution to this is to offer flexibility. The planner’s job is to offer the building space and amenities that employers and employees are looking for. Agglomeration firms like to cluster near amenities, in particular. This means providing amenities and services while creating walkable, cyclable communities around employment centers with easy access to transit with a mix of employment space. Dr. Blais raised the example of Brooklyn Navy Yard (in Brooklyn NYC), which now offers space for a wide range of uses, including heavy and light manufacturing, shared workplaces, creative spaces, commercial, retail and office space.
Mr. Gill noted that planning should focus on enabling urbanization in the 905 regions by providing the similar urban amenities as downtown Toronto. However, planning for employment goes beyond transit and services, and he pointed out that Durham is taking steps to embrace automation. This includes providing programs to train and retool the labour force for future jobs.
While the Neptis Report was a good step in the right direction, a significant amount of work is still needed to understand how both labour and business spatial patterns are currently being impacted by market forces and how they might change in the future. But, to do this, more data and data-driven analysis is needed.
In the meantime, the few things that everyone can agree with is that the GTA needs better transit planning and more urban amenities in the suburban urban centres to make them more attractive to employees and employers. The Ontario Places to Grow Act, even in its new form, is also one of few North American regional growth plans that does not include an economic development component. A more coordinated, encompassing plan would include a regional economic development strategy.