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Prosperity Playbooks Experts Weigh in On Toronto's Economic Performance
March, 2008
Two separate specially appointed taskforces have recently released reports and recommendations on Toronto's fiscal outlook and economic competitiveness.
In January 2008, the Mayor's Economic Competitiveness Advisory Committee unveiled Towards an Agenda for Prosperity. Toronto's Place in the World, which outlined 40 proposed priority actions for improving Toronto's business climate, international profile, productivity and growth.
In February 2008, the Mayor's Fiscal Review Panel released A Blueprint for Fiscal Stability and Economic Prosperity - A Call to Action, which includes recommendations relating to Toronto's competitiveness, financial management, revenue opportunities and savings potential in the near to medium term.
The following are selected recommendations from the reports relating to the real estate and development industry - Editor.
SELECTED RECOMMENDATIONS FROM A BLUEPRINT FOR FISCAL STABILITY AND ECONOMIC PROSPERITY - A CALL TO ACTION:
INCREASE THE REVENUE BASE
The City must take a multifaceted approach to growing revenues including encouraging intensification through zoning changes, less red tape, user fees, exploring with the Province the possibility of new regional transportation related levies, and adjusting its real property taxes to bring them in line with competing jurisdictions.
• The City should encourage more development through new intensification, planning strategies and less red tape.
• The City should encourage more development and tenant retention through an accelerated reduction of the ratio between commercial and residential property taxes in ten years or less to bring them in line with competing regions.
• The City should implement a program that tracks the full cost of providing all municipal services and, wherever desirable and respecting varying abilities to pay, it should seek to recover the cost of the services through user fees.
• The City should engage the Province in a serious review of uploading the Don Valley Parkway and the Gardiner Expressway in exchange for a large share of any regional tolls or other revenue streams. This should be administered by a regional authority like Metrolinx.
• As part of its Green Strategy, the City should consider a non-residential surface parking tax, the use of dedicated funds to increase bike routes, the establishment of car-free zones and other environmentally friendly measures.
Benefit: Taken together, these recommendations will help the City dramatically improve its annual revenue, consistent with its other policy goals. By uploading the Don Valley Parkway and Gardiner Expressway it could participate in hundreds of millions of dollars of new fees annually and enjoy a large component of equity in an asset worth as much as $7 billion.
UNLOCK THE VALUE OF REAL ESTATE HOLDINGS AND INFRASTRUCTURE
The City must have a new structure and strategy for managing, coordinating and maximizing the real estate holdings (conservatively valued at $17.9 billion) and the infrastructure of the City and the Agencies, Boards, Commissions and Corporations (ABCCs).
• The City should assess and evaluate the highest and best use of the real estate holdings of the City and the ABCCs.
• The City should create a new high-level real estate department, headed by a new Senior Officer for Real Estate, which should supervise the management and development of the City's real estate holdings (similar to Ontario Realty Corporation).
• The Senior Officer for Real Estate should have the ability and the authority to coordinate and manage the real estate holdings of the City and of the ABCCs, where permitted.
• The City should establish new incentives for the personnel of the City and the ABCCs to cooperate and help drive the process of extracting best value from real estate holdings with a target of realizing $150 million of incremental benefit annually.
• The City and real estate staff should assign an internal notional rent for City space and lands occupied by City departments to capture the true costs of delivering City services, and explore outsourcing options for all or a portion of the portfolio.
• The City should create a new high-level infrastructure department, possibly an adaptation of an existing department, headed by a new Senior Officer for Infrastructure for the City and the ABCCs, where permitted.
Benefit: Taken together, these recommendations will dramatically improve how the City manages and approaches its real estate holdings and infrastructure projects. We believe the City should conservatively target $150 million annually from real estate development, sales, etc., and significant additional savings from better infrastructure supervision and monitoring.
INTEGRATED APPROACH TO ECONOMIC DEVELOPMENT AND PLANNING
The City should recognize the importance of planning and economic development for future regional economic growth and prosperity.
• The City should appoint an Economic Development Senior Officer reporting to the Mayor.
• The Mayor should task the Economic Development Senior Officer to work with all ABCCs and other outside stakeholders to implement the recently completed Prosperity Report.
• The Economic Development Senior Officer and the Office of Partnerships should drive revenue opportunities such as innovative business ventures, the development of brownfield sites, attracting new investments and driving private sector partnerships, etc.
• The City should enhance and streamline its Planning Department to be more user-friendly and efficient.
• Council should amend the City's Planning Act Section 37 by-law and guidelines so that the money collected can be split equally between the Ward and a Citywide fund so that the Mayor and Executive Committee can direct the Citywide portion to key identified community services in high-priority areas.
Benefit: Taken together, these will dramatically improve the City's economic competitiveness, overall investment and job creation in the city, and the economic and social health of the region.
For a complete overview of the report's recommendations, see the City of Toronto's web site at www.toronto.ca/mayor_miller/pdf/blueprint_highlights_20080217.pdf
SELECTED RECOMMENDATIONS FROM AGENDA FOR PROSPERITY
( Designate a core senior staff team to triage industrial, commercial and institutional (ICI) investment proposals together with economic growth and job creation teams to accelerate the review of investment proposals that will increase the City's industrial and commercial tax base and create permanent jobs.
( Position, fund and provide appropriate tools and resources to a development agency such as the Toronto Economic Development Corporation (TEDCO), with a mandate to:
- Strategically and proactively facilitate rehabilitation and redevelopment of brownfield sites, incubate industries, and develop land and building assets;
- work with other orders of government, agencies and the private sector to pursue public interest and partnerships; and
- establish performance indicators for the agency that include net new jobs, leverage of public asset value, and net new industrial, commercial, institutional (ICI) assessment to the City of Toronto.
( Establish a policy framework to ensure net new growth in jobs, assessment and wealth:
- Develop and implement new policies, tools and incentives to stimulate economic growth consistent with public policy objectives, including public interest partnerships and the alignment of land use and tax policy to support green development and brownfield rehabilitation, accelerate transit-accessible employment and reduce employment sprawl.
- Establish clear pathways and provide direction on successful redevelopment of employment lands for employment purposes.
- Align city, provincial and federal investment attraction programs and incentives and implement 'one stop shopping' customer service to facilitate and expedite investment decisions.
- Implement procedures that ensure that municipal policies and programs are viewed through an economic competitiveness and growth lens so the impact on jobs, investment and business growth are understood.
( Maintain and grow employment and investment in key established economic clusters including financial services, business and professional services, biotechnology, screen-based arts industries, telecommunications, tourism, design, aerospace, automotive, food processing and other manufacturing industries.
( Initiate activities that focus on development and expansion of emerging clusters, specifically: cultural industries, green - energy and environment - industries, and education.
( Maximize the potential of Toronto's labour force and ensure that all Torontonians have access to education, opportunities and skills development by working with school boards, post-secondary institutions, labour union training centres, community-based and private sector partners and other orders of government.
( Identify new polices, tools and incentives that stimulate economic growth, including targeted investment funds to stimulate commercialization, competitiveness and regional investment attraction, consistent with public policy objectives (e.g. transit-accessible employment, brownfield development) and tackle market failures (e.g. mismatch of labour and jobs, economic inclusion.)
( Ensure Toronto has the fiscal capacity to invest in its future and sustain its long-term competitiveness.
- Eliminate unfounded mandates and secure permanent revenue streams that grow with the economy to provide both adequate resources and an incentive to reinvest in productive infrastructure that contributes to economic growth and attracts labour and investment.
- Identify opportunities to increase own-source revenues and explore public interest partnerships in a manner that supports economic competitiveness, jobs creation and expansion of the industrial and commercial property tax base and achievement of public policy objectives.
- Continue to identify, evaluate and implement operational efficiencies and benchmark performance against other provincial, Canadian and peer cities of equivalent size.
( Secure commitment to a long-term program and timetable with milestones to enhance, expand and integrate Toronto's local, regional, national and international transportation system to prove an integrated reliable, high-frequency, high-speed network that will reduce congestion and ensure the efficient and effective movement of people and goods within the city and across the broader economic region to sustain long-term economic growth and productivity. The program should:
- Expand the subway and LRT (light rail transit) networks within Toronto.
- Increase the number of stations and frequency of GO transit service.
- Support improved coordination and delivery of cross boundary transit services.
- Renovate and redevelop Union Station to accommodate increased rail and bus service and to become a destination as well as a multimodal transportation hub. Identify other opportunities to integrate alternative transportation services.
- Improve transportation access to employment districts.
- Implement improvements to expedite goods movement.
- Provide rail link from the downtown core to Toronto Pearson International Airport that will also improve regional transit service.
- Maintain and expand international air connections to major investment markets.
The complete text of Agenda for Prosperity can be found on the City of Toronto's web site at http://www.toronto.ca/prosperity/.
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