It is widely recognized that an important measure of a city’s economic success is its ability to attract and retain companies that are able, over time, to raise the salaries of their employees.

Unfortunately, this does not seem to be the case in Toronto, when compared to the rest of the country.

Census data for both Toronto and the larger Toronto census metropolitan area (CMA) tells the story. Between 2001 and 2006, median incomes increased in the region by just 4.5%.

This figure represents roughly one-third of the 15.8% increase recorded by the country as a whole and less than half of the 9.8% increase in incomes recorded for Ontario as a whole.

As a result of this below-national-average growth over the past five years, the median income in Toronto moved from a level about 5% above the rest of the country to approximately 5% below.

Given the resource boom in Alberta during the period 2001 to 2006, it is not difficult to explain why median incomes in Calgary (+20%) and Edmonton (+26%) were well above the national average. However, the fact that incomes grew by 17% in Halifax and 15% in Montreal, according to the census data, raises serious questions about what Toronto is doing wrong.

The analysis of census data undertaken by the Fraser Institute also found that, between 2001 and 2006, the number of management jobs in Toronto declined 8.4% but increased 3.7% in the major cities outside Ontario. The number of business finance and administration jobs in Toronto also dropped by 1.3% in the same period, while they increased by 9.6% in centres outside Ontario.

As part of its research, the Fraser Institute commissioned the polling firm Compas Inc. to ask Toronto residents to evaluate the city’s performance relative to other major business centres in the country.

According to the survey, only 20% of those interviewed thought the city was improving, whereas 40% of respondents thought the city is “definitely” or “probably” falling behind.

Look for a discussion of the reasons for this serious deterioration in Toronto’s economic health in a subsequent Snapshot.

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