Bad Greater Toronto Productivity

The Globe has an article about a study about Greater Toronto's productivity lately. Some people seem surprised it is poor, I'm certainly not:

"The economy of the Greater Toronto Area is lagging those of its North American peers, a new reports says.

Declining productivity – a measure of economic output per person – is holding back the region that accounts for 20 per cent of the country’s economy, says the study by Toronto Region Board of Trade and the Institute For Competitiveness and Prosperity."

"The report appears to contradict Toronto Mayor Rob Ford, who, while campaigning for re-election, has claimed the city is booming. He has pointed to the dozens of cranes, and maintains the tourism sector is busy and unemployment is low.

But the former business school dean who co-authored the report said Toronto’s productivity fell 6 per cent between 2000 and 2010, at the same time that Vancouver, Calgary and a handful of large cities posted gains. Montreal’s productivity declined slightly."

"The report finds that while wages have risen slightly, economic prosperity has fallen – a fact Mr. Martin said came as a shock. “We’re considerably poorer than we would be, as an economy,” he said. “We have fewer tax dollars of revenue and fewer dollars in the pockets of Torontonians compared to … Seattle, Chicago, Boston.”

Mr. Martin said although the report drew on data collected in 2010 or 2012, it remains accurate. He said nothing has taken place since then that would halt Toronto’s decline."

I'm surprised people are surprised. Toronto's economy has been based around real estate for what seems like forever and certainly that's not going to be good for productivity gains. Ontario's overall economy has been weak and manufacturing has also been weak where productivity gains often come from.

One has to wonder what happens to Toronto's economy if building of new condos significantly slows. In some ways Toronto the last fifteen has been basically a Ponzi scheme where more population is added and somehow the economy expands overall, but GDP growth per capita is stagnant if not negative.