Toronto’s 10-year economic plan calls for city to tackle congestion, inequality, housing

The City of Toronto is unveiling a strategy to guide its economic growth over the next decade, calling for “a new approach” to help solve some of its toughest challenges.

Dubbed “Sidewalks to Skylines: A 10-Year Action Plan For Toronto’s Economy,” the 72-page document provides a checklist of items to guide the city’s growth.

“Delivering on the action in ‘Sidewalks to Skylines’ will keep Toronto’s engine firing on all cylinders and put the city on a path to continue its growth,” Mayor Olivia Chow said at a news conference to unveil the plan Wednesday. “And we plan to double our GDP in 25 years, that’s ambitious.”

The plan proposes 29 key objectives over the next five years.

More details on new deal in 2025

At the top of the list is a new deal with the provincial and federal governments for permanent sustainable funding for the city.

The city and the province worked out the first part of their “new deal” last year. The plan includes saving the municipality billions of dollars by having Ontario take back responsibility for the Gardiner Expressway and the Don Valley Parkway.

Speaking at a news conference Wednesday, Chow said there will be ” a lot more details” about the second part of the plan next year.

“Whether it is transportation, or housing – all those operating dollars is a two year package,” Chow said.  “Other than the uploading (the highways) – that’s forever, hopefully. And so we will have to conclude the New Deal part two before the expiration of the 2026 funding.”

While the federal government eventually joined discussions with the city and the province, they have been less willing to commit to a deal with Toronto, favoring instead a piecemeal approach to project funding in various cities.  

The Toronto census metropolitan area (CMA) accounts for 20 per cent of the national economic output as well as 52 per cent of Ontario’s,” the report’s authors note.

The plan sets a target of 2030 for the city to finish hammering out agreements with both levels of government.

Other key action items in the plan include making the city “the most competitive business environment in North America” by reducing the commercial-residential property tax ratio to 50 per cent less than residential levy increases in any given year, until the provincial ratio is met.

It also calls for a new business incentive program by the end of 2025 to “support targeted employment uses, increase high-quality jobs, stimulate investment across the city, drive broader city-building goals, and enhance Toronto’s competitive edge.”

Toronto needs to address housing and inequality

The plan’s authors also said Toronto needs a “new approach” to economic development that addresses more than dollars and cents.

“While this Action Plan is concerned with GDP and job growth, it seeks to also address increasingly urgent issues of shared prosperity and sustainability,” the report says. “This reflects a necessary evolution in how the City approaches economic development.”

It notes that while a high quality of life has historically been a strong asset to the city, “this asset has been increasingly at risk” in recent years, particularly with respect to housing and wealth distribution. The rising cost of housing, it notes, has drastically outpaced income growth over the past few years, leaving many people struggling to stay in the city.

“Rising housing costs are a significant concern, with home prices soaring by 20% since 2019, while the median annual income has stagnated at a mere 0.4% growth rate,” the report states. “This disparity threatens to undermine Toronto’s appeal as a destination for skilled workers.”

The average cost of a home in Toronto in 2023 was more than $1.1 million.

“To qualify for a mortgage of that size, a household needs annual income of nearly $220,000 plus a down payment of $200,000,” the report says. “The average income in Toronto for workers age 15+ across all occupations was $49,000 in 2021. The median household income is $84,000.”

The plan also flags a sense of safety as an issue as well. It calls on Toronto to “urgently address street homelessness, mental health and addiction,” but there are few action items attached aside from coordinating across city government and with the province to ensure that housing-first programs succeed.

In order to collaborate with external partners to “reduce barriers to economic inclusion,” the plan calls for targeted property tax relief for “anchor institutions driving inclusive economic development in Toronto.”

To advance Indigenous economic development, the city should open an Indigenous Centre for Innovation and Entrepreneurship next year, host a Toronto Indigenous Economic Summit in 2025 and launch an Indigenous Economic Strategy by 2026, the report says.

Steady growth projected

Other key goals include building affordable housing faster tackling congestion through an updated congestion management plan, and dealing with the climate crisis.

The plan also calls on the city to create more opportunities for youth, noting that the Toronto region is expected add 3.3 million more people by 2046.

“Issues of intergenerational fairness, as with climate change and infrastructure investment, are emerging across many policy fronts, as the economic prospects for Generation Z and beyond appear more limited than the generations which preceded them,” the report states. “This calls for a ”youth lens” to be increasingly applied to economic policy development.”

The authors note that Toronto “has remarkable resilience, withstanding both the 2008 Great Recession and most recently the COVID-19 pandemic,” but warn that the city needs to focus on the basics to stay on sure footing over the next decade.