Spreading the wealth: What the Vital Signs report reveals about Toronto's economic success story
While much of the world has been beaten down by the global economic crisis, Toronto and Canada have offered a unique shelter from the storm. You can see it in the real estate investment flooding the core, in the new businesses opening across the GTA and in our continued success at luring young talent from around the globe. As several US cities and several European nations wrestle with how to downsize, Toronto's current challenges emerge from our growth—more people, more development, more prominence, more pressure.
The glass towers on the skyline and impressive rankings on liveability indexes don't tell the whole story. This year's Vital Signs report
from the Toronto Community Foundation looks for the sources of our successes and the solutions to our struggles in detailed data about how we live now. The 239-page analysis of the health of the economy, people, neighbourhoods and culture of Canada's largest city, released October 2, aims to find the reality behind the buzz.
Money doesn't buy health, happiness or public safety—or maybe it does. Economics are certainly the easiest way to calculate the success of a city and they run all the way through this year's Vital Signs
. In the last year or so, Toronto has demonstrated that it can nurture new industries as well as revive old ones. The challenge, it seems, is spreading the opportunities around.
First off, many Torontonians are in better financial shape than they've be in ages, especially compared to the inhabitants of other cities. Vital Signs
reports that not only are Torontonians declaring the lowest levels of personal bankruptcy since 2000 (a 24 per cent decline over 2010 and a 91 per cent drop since the peak in 2009), we also have impressive purchasing power.
"Purchasing power is higher in Toronto than in many places in the world when net hourly wages are factored in (deducting taxes and social security contributions)," states Vital Signs
. "One way of measuring purchasing power is by comparing how long someone has to work to buy an identical, readily available product. Out of 72 cities, workers in Toronto rank with Luxembourg and Chicago, in having to work 11 minutes to earn the price of a Big Mac. (One minute less than in 2009). On average in the global cities surveyed in 2012, it took 28 minutes to earn a Big Mac." (Although Big Macs are an easy way to measure purchasing power around the globe, they may not be the best way to spend our hard-earned cash. More than 14 per cent of Torontonians 18 years and older are obese, better than the Ontario, Calgary, Ottawa and Montreal averages but twice the rate of Vancouver.)
In several sectors, business is booming. Tourism is up (India has replaced Germany as our third-largest source of overseas visitors, after the UK and China). The film, television and commercial production industry has bounced back after a decade of decline; combined with growth in the digital media industries, Toronto earned more than $1.13 billion from on-location shooting in 2011. The GTA has gained 20,000 jobs and $2 billion to its regional economy from the $20 billion invested by the private sector in green energy in Ontario. Meanwhile, housing starts were up 20 per cent in the first quarter of 2012 compared to a year earlier, and while there is talk of an end to the building boom, a city analysis says that housing starts continue to be roughly in balance with population growth.
Some of the good news comes with a few thorns. For example, impressive growth in the not-for-profit sector—more than 17 per cent between 2001 and 2006— brought more jobs to the city but many of them tend to pay on the low end of the scale. On average, we're not making much more money than we were before.
"The median hourly wage in the Toronto Region remained higher in 2011 than the median for the city of Toronto, but wages have been declining in the region since 2009," states the report. "In July 2012, the (unadjusted) median hourly wage in Toronto was $20.21, unchanged from July 2010. For the region as a whole, the median was $20.68 an hour, up from $20.19 the year before."
While Toronto offers a good share of highly skilled "knowledge work" jobs, it offers proportionately few "middle jobs"—which require demonstrated skill or on-the-job training, but less experience and education—than the rest of Ontario. "New research on the city's increasingly 'hourglass' economy points to wide wage disparity, and age, gender and country of origin 'ghettos,' especially among entry level jobs," states the Vital Signs
While gains in the regional job market in 2011 benefitted immigrants, the biggest increases were in relatively poorly paying sectors like accommodation and food services. There is increasing evidence that Toronto's prosperity is not being spread across the population, with new Canadians and young people, who suffer from high unemployment rates, doing the worst. According to the Toronto Board of Trade, the GTA is the only Canadian metropolitan area to receive a C grade on income distribution. "The Gini coefficient (the measure in a community of the deviation from perfectly equitably shared income) has not changed since 2010, but ranking against 24 global centres has slipped to sixteenth, (from seventh out of 15 a year ago)," states the report. "However, Toronto remains ahead of the seven US metropolitan centres on the scorecard."
But then there are sectors where we outperform. Despite cuts in municipal funding to the arts, the region's creative sector has been outpacing the growth of other key sectors such as financial services and the food and beverage industries. Employment in cultural industries has grown 47 per cent since 1987, representing just over three per cent of total industries in the region. The arts may never replace manufacturing and services as sources of wealth, but they certainly show where Toronto's heart is at. And, setting all the numbers aside, that can be as important as the bottom line.
Please join us out our free Yonge Talks event on Thursday, October 11 where we'll dig deeper into the insights in this year's Vital Signs
report. For more information and to register, click here
Paul Gallant is Yonge Street's managing editor.