Wondering Why the GTA Economy Has Been Growing So Fast and What the Future Holds? If So, Joe Berridge Is a "Must-Read"
By: Frank Clayton
October 7, 2019
Joe Berridge’s new book Perfect City (Sutherland House) is a 'must-read' for anyone interested in the growth dynamics of the Toronto metropolis (GTA). In his chapter entitled “Toronto: The Accidental Metropolis”, Berridge provides a short, readable tally of the influences behind the GTA’s robust growth and the challenges to keeping it going.
We should say upfront that we have minor concerns with Berridge’s Toronto’s write-up. At times it drifts between discussing the GTA and the City of Toronto, leaving the impression they are the same, which of course they are not (we use the terms interchangeably in this blog). It uses American spelling for words like 'centre’ and 'favor' even though published in Canada. Lastly, Perfect City means Berridge, as a planner, has succeeded in writing a coherent polemic on Toronto’s growth drivers, something an economist has yet to do.
On the positive side, it is refreshing to read the work of an urban planner with the interest and the skill to prepare this analysis on Toronto. As Alain Bertaud asserts in his recent book Order without Design, many urban planners have no understanding of, or interest in, economics or in how markets work.
This blog incorporates excerpts from Berridge’s chapter on Toronto which encompasses his analysis of the key factors behind the GTA’s extraordinary and unexpected rise to the status of a global city and its prospects. We make no effort to critique what Berridge says even though we do not agree with it all – rather, we wish only to present the highlights of his analysis. We am sure Berridge would welcome constructive commentary from our readers.
Among the questions posed by Berridge are:
· What propelled Toronto, a "no-account dorp", to the urban elite?
· And why is Toronto’s self-image so at war with its global significance?
Regarding the second bullet, he observes that a speaker at a European conference once labelled Toronto as “the biggest city in the world that nobody’s ever heard of.”
He points out Toronto is only one of two cities to have risen among the ranks from the non-economically significant to joining the premier league of global metropolises. Singapore was the other, and while he attributes its rise to “deliberate intent”, Toronto’s was "serendipitous and accidental”.
What has made the GTA such an economic success?
To answer this question, Berridge huddled with Richard Florida, a well-known urbanist living in the city of Toronto and the author of (among other things) Who’s Your City, and came up with two essential factors: immigration and spikiness.
Ever-flowing river of immigration
According to Berridge, “Toronto has now matured to become an accidental metropolis because its unintended global ascent has been driven almost entirely by external forces, principally immigration.”
Changes to the Federal Immigration Act in 1967 opened the doors of Canada to the world. The immigration system no longer favoured white Europeans. Moreover, the immigration points system introduced favoured those with good work qualifications in their peak earning years and was structured to admit families rather than individuals.
Toronto not only received many immigrants on an ongoing basis, but also experienced short-term upsurges due to developments in Hungary (the failed revolution of 1956), the United States (the Vietnam War), Quebec, (where the election of a separatist government in 1976 led to the migration of large numbers of English-speaking Quebecers to Toronto), and other world trouble spots like Viet Nam.
Berridge argues that Toronto is unique among global cities in that it welcomes immigration. "There's something in the city's DNA that seems to have made immigrant acceptance easier …. Toronto has created home better than any city in the world, while simultaneously, and accidentally, jet-fueling its economic machine".
The urban world is not flat – it is "spiky"
As mentioned, Berridge consulted extensively with Richard Florida, who notes that economic growth is increasingly being generated by a select few urban mega-regions. That is, growth is ‘spiky’ in particular regions rather than being spread equally across all urban regions. Indicators of spikiness include high-tech hiring, start-up companies, numbers of PhDs in the workforce, and new patent registrations, all of which concentrate in a few global mega-regions, including Toronto, which anchors a large mega-region extending from Oshawa to Barrie to Waterloo to Niagara Falls.
Berridge discusses a number of critical macro-determinants of global metropolis success that Florida and his team have identified and analyzes their role in Toronto’s growth. These include:
Population size matters
Big and bigger metropolises are the home of the new economy.
The GTA’s population is 6.5 million, though this number is much higher if the populations of adjacent metropolitan areas are included. While there are many global metropolises larger than Toronto, not all of these have not joined the global elite, however. Other determinants must be at work a well.
Airports with global connectivity are a fundamental component of urban infrastructure in global cities
Over time, fewer and fewer cities are developing better and better linkages to more destinations. Toronto Pearson is said to be the fifth-best internationally connected airport in the developed world. It is the second international gateway to North America after JFK in New York.
Berridge argues that it is no coincidence that the area around Toronto Pearson airport is the second largest employment cluster after the city centre. This employment pattern is a feature of all successful global metropolises.
Advanced education providing huge pools of specialized labour in global cities
Berridge argues that cities run on brains. To attract the best minds, universities need to maintain funding and to attract talent for a metropolis to compete globally.
In this regard, the news is positive as the University of Toronto now regularly ranks in the top twenty of world universities.
The financial sector is a crucial sector for the top dozen global cities. Not only does it provide substantial employment, it also has a significant multiplier effect on key professional services, such as lawyers, accountants, and management consultants, fintech and real estate, and is a disproportionate generator of tax revenues.
Toronto has risen to one of the top world financial centres, according to the City of London Global Financial Index.
The quality of urban life
Liveability attracts human capital, the mobile creative class that fuels the machine of the modern economy.
Berridge argues that Toronto provides public services that range between good and excellent, and its neighbourhoods generally have low rates of crime. Its well-functioning institutions and intelligent immigration policy enable social mobility.
Not all is hunky-dory in the GTA, however
An inevitable rise of urban inequality seems to be inherent in the kinds of businesses that fuel growth in successful cities. Just a few great cities are eclipsing all other smaller cities and the non-urban world. Within them, the wealthy few are pulling away in terms of economic prospects from the mass of the urban population.
However, in comparison with the top dozen of global cities, Berridge argues Toronto seems to have the lowest level of income inequality.
Challenges for the future - keeping Toronto's growth machine going
The dangers of complacency
Berridge argues that Toronto cannot become complacent. He warns against getting lulled in believing that Toronto's serendipitous and accidental rise can continue without a more intelligent management of its economic competitiveness and greater care for the fundamentals (e.g. the physical and social infrastructure).
The GTA will still be receiving 125,000 new immigrants each year. The most considerable risk for an immigrant city like Toronto is if those new residents have no way of realizing their dreams by not finding work.
Toronto has the weakest, least capable governance system of any of the world's leading cities
In practice, the mayor is the only political figure at City Hall who worries about the whole city. Councillors get re-elected time and again by pandering to small circles of local activists whose numbers are sufficient to ensure victory given low voter turnout. Toronto may be a global city, but its leadership retains the suspicious instincts of a village.
What must be done to keep Toronto’s happy accident from having an unhappy ending:
Berridge argues that, for the GTA to retain its current status as a global metropolis, it must do the following:
· Upgrade its infrastructure;
· Not allow traffic congestion to snarl traffic to a stop;
· Adequately fund the bedrock community services on which the city's success is established; and
· Provide affordable housing at the scale of the problem.
Without these investments in its future, the GTA will have a heavy price to pay. Toronto’s happy accident will have an unhappy ending.
So, there you have it: Joe Berridge’s views on the factors underlying the GTA’s past and future growth. They present an excellent starting point for a more wide-ranging discussion and analysis.