Institute Releases Third Working Paper

Released June 20th, 2003
Ontario’s city dwellers lag nearly $6,000 per person behind US city dwellers in prosperity

Ontario’s cities account for the province’s prosperity gap versus leading US states. GDP per person in its city regions is almost 13 per cent lower than the average in city regions in 16 comparable North American jurisdictions. This prosperity gap equates to $5,779 for every person in Ontario. In contrast, Ontarians living outside city regions were $937 or 3 percent ahead of their US counterparts in the same jurisdictions.

This was a conclusion of Working Paper 3, Missing opportunities: Ontario’s urban prosperity gap, released today by the Institute for Competitiveness & Prosperity. The Working Paper demonstrates that Ontario’s urban areas benefit from some significant advantages in productivity and prosperity. They also rank well in comparisons of demographic and creativity indexes.

But Ontarians are missing opportunities and need to overcome some important handicaps to increase productivity and prosperity in metro regions.

“Our urban areas benefit from a vibrant creative class, a steady inflow of well-educated immigrants a first rate primary and secondary schools system, and a great mix of industry clusters,” said Roger Martin, Chairman of the Institute and Dean of the Rotman School of Management at the University of Toronto. “But our work indicates that our aspirations may be stopping short of what is required to achieve prosperity levels enjoyed in the largest US states.”

Referring to findings in the Working Paper that showed Ontario student achievement scores better than international averages and well ahead of US results, Martin continued, “Our high school students do better on standardized tests and have higher graduation rates than their US counterparts. Yet fewer of these graduates are pursuing university and post- graduate degrees - by a huge margin against some states like Massachusetts, New Jersey, and Pennsylvania. This is an urban prosperity issue since cities attract more knowledge-based industries and need educated workers - who have higher lifetime earnings.”

The Working Paper also points out that Ontario and Canada are not getting the full benefit of the “brain gain” achieved from immigrants. They tend to have more advanced degrees than those born in Canada but face higher obstacles to applying their skills fully to benefit Ontario’s prosperity.

Other sources of missed opportunities identified in the Working Paper include a federal fiscal framework that transfers resources out of urban regions; municipal fiscal and governance structures that need improvement; and the urban/rural imbalance of political representation federally and provincially.

In its First Annual Report released last November, the Task Force on Competitiveness, Productivity and Economic Progress identified a prosperity gap between Ontario and its peer group of 15 other jurisdictions, including the 14 most populous states and Quebec.

This Working Paper confirms that “the prosperity gap identified in the Task Force’s Annual Report is in our city regions - and that’s where the closing of the gap has to occur.”

Following today’s release, the Institute is continuing its research work as well as engaging business leaders, academics, regional development agencies and the public in a consultation process on how to do that. The Task Force will publish results in its Second Annual Report to the people of Ontario this fall.

About the Institute
The Institute for Competitiveness and Prosperity is an independent not-for-profit organization established in 2001 to serve as the research arm of Ontario’s Task Force on Competitiveness, Productivity and Economic Progress. The Institute is supported through the Ministry of Enterprise, Opportunity & Innovation. Working papers published by the Institute are primarily intended to inform the work of the Task Force. In addition, they are designed to raise public awareness and stimulate debate on a range of issues related to competitiveness and prosperity.

About the Task Force
The creation of the Task Force on Competitiveness, Productivity and Economic Progress was announced in Ontario’s April 2001 Speech from the Throne. Roger L. Martin, Dean of the Joseph L. Rotman School of Management at the University of Toronto, is the Chairman.

The mandate of the Task Force is to measure and monitor Ontario’s competitiveness, productivity and economic progress compared to other provinces and U.S. states, and to report to the public on a regular basis. Members of the Task Force were announced on October 17, 2001 and details can be found at www.CompeteProsper.ca

It is the aspiration of the Task Force to have a significant influence in increasing Ontario’s competitiveness, productivity and capacity for innovation. This, they believe, will help ensure continued success in the creation of good jobs, increased prosperity and a high quality of life for all Ontarians. The Task Force intends to seek breakthrough findings from their research and to propose significant innovations in public policy in order to stimulate businesses, governments and educational institutions to take action.

The complete Working Paper can be downloaded directly from: http://www.competeprosper.ca/public/wp03.pdf

For more information contact James Milway, Executive Director of the Institute for Competitiveness and Prosperity at 416.920.1921 ext. 222.