Toronto in decline..... (Back in MY day we had respect!)

[Coltaine79]

I love how we're at 10% employment, (the rest of Ontario is even worse), yet the immigration floodgate continues to get larger. Can someone please fill me in here? By the time i'm out of University, I don't see myself having a job.

Don't assume that all immigrants are simply worker bees who are going after your university-age entry-level office jobs (sorry to be an ass and assume).

Many are bringing capital ($$$) to this country and starting businesses. You might be working for one of them someday.

 

[Glen]

Glen:

You kept on insisting that the current crop of office towers are built with tax breaks - what tax breaks, exactly? Proof of such would be nice, thanks.

AoD

A preferential BET tax rate of 1.6%
No development charges.
Section 6 of the ETBC program;
6(a)(i) Conditional upon the Province implementing new classes for all new
commercial and industrial development for 2008, a City program be approved,
commencing in 2008, to provide for a lower municipal tax rate to apply for all
new non-retail office and hotel development, and expansions of 50% or more
in gross floor area related to non-retail office and hotel uses, with such a lower
tax rate being based on a tax ratio of 3.0 times the residential rate, and
determined from the time the Occupancy Permit is issued, and that this target
ratio be reviewed in five years time (2012);
(a)(ii) The Province be again requested to grant the City the authority to establish
lower tax rates for a limited time period for new or expanded non-retail office,
hotel and industrial properties described above.

The comparable treatment clause for assessments, though it has been phased out.
And the TEIG program itself, which is for non retail development so long as the above ground building permit was issued after Dec 13 2007. ( http://www.toronto.ca/invest-in-toronto/pdf/08-0516.law.pdf)

 

[Glen]

Saw this in another forum.........

Bank of Montreal is moving their contact centre and support staff out of one of their main offices downtown at Yonge & Bloor(Manulife Centre) and to Mississauga. The loss to Toronto is about 1200 jobs.

and in March Rogers moved its offices at Vic Park and Sheppard to Brampton.

 

[adma]

The way Glen spins it, Manulife might as well be en route to being an untenanted Book Tower-type hulk...

 

[kettal]

Bank of Montreal is moving their contact centre and support staff out of one of their main offices downtown at Yonge & Bloor(Manulife Centre) and to Mississauga. The loss to Toronto is about 1200 jobs.

This sucks, but presumably this is to vacate the manulife space for new jobs.

 

[tkip]

I forgot about this thread. Umemployment rates and recession?

I don't know but I really didn't see evidence of widspread unemloyment in the Toronto while we were going through a recession. My friends and I get together and talk about this and yet we've continued to see shopping malls overflowing with people spending and theatres packed and restuarants and clubs drawing crowds. Outside the city things are probably worse off.

Though we kind of wonder sometimes if we're in a much deeper situation economically speaking than most realize and if the government is trying to hide or manipulate data as to not spook the public. And I keep hearing stories that refuse to go away that Canada has a housing bubble ready to burst especially when interest rates start to go up.

Real estate and economics is not my speciality though.

 

[taal]

Okay ... I looked into this a bit more ... yes BMO is moving their call center ... many companies have been doing this for years ... yes taxes in Toronto are higher, but even if they were the same (or lower for that matter), rent would still be higher in high density areas such as Y&B - anywhere on that Yonge line for that matter - and they're also higher in MCC - that's why they are not moving there.

Regarding Rogers, they bought Nortel's giant headquarters in Brampton a few years back ... since that point they've been moving jobs into this large facility.

Summary: BMO moving it's facilities likely has little to do with Toronto's tax situation - no matter how you spin it - that is, why they're moving out of downtown - you can argue, however, that other parts of Toronto should have been even more enticing i.e. some parts of Scarborough maybe. Rogers, this is a results of transaction that took place many years ago - you can argue that transaction has something to do with the high tax situation - but the key here, again, is where they decided to move - not MCC or other high density employment centers - so if jobs left downtown (which wasn't the case here) the same question comes up - other parts of Toronto are strugling.

I think that's the key here, outside of downtown, many parts are struggling to attract tenants when they should be very enticing i.e. along the 401 / 404 ...

 

[taal]

I just wanted to add .. we talk a lot about the property tax in toronto for businesses. One thing that isn't mentioned as often, is the provinces business education tax - which is disproportionally higher in Toronto compared to the rest of the GTA (even though it doesn't cost anymore to provide these services for the city proper) - there are plans to lower this by 2014 from what I recall but this also contributes to this imbalance.

I'm not really sure of the history behind this i.e. why was it ever higher in Toronto in the first place.

While we're at it, let's take a look at some of the differences:
Toronto
TYPE CITY EDUC TOTAL
Residential 0.5895702% 0.2410000% 0.8305702%
Commercial General 1.9367482% 1.6615560% 3.5983042%

Missi
TOTAL
Residential RT 0.982115%
Commercial CT 2.384381%

Markham TOWN REGION EDUCTION TOTAL
Commercial - Occupied 0.310127 0.603598 1.385926 2.299651

Brampton: TOWN REGION EDUCTION TOTAL
Commercial: 0.627007% 0.645782% 1.439162% 2.711951%


So on average, we're talking about a 1% difference between Toronto and it's nieghbours about 1.5 times greater overall.

Now check this out, a nice summary for 2009:
http://www.city.vaughan.on.ca/images/stories/business/pdf/Comparative%20tax%20rates%20commercial%202009.pdf

The Toronto rate cited there seems higher then the current rate so I'm not sure how accurate it is but it gives you a good idea anyway ... interesting how the Kitchener / Waterloo area has extremely high tax rates ... something seems suspicious above those figures.

It looks like the education component can account for about 20/30% of the disparity but rest is Toronto's doing.

Toronto's residetial tax rate is anywhere from .1 to .4% lower.

So at the end of the day, does this imply Toronto's rent will be 1% higher just to account for the tax difference ? There will be many other differences in rental rate due to location / demand ... so on.

 

[Northern Light]

This thread, and Glen's usual doom-saying has become tiresome.

I will start a new thread for those who don't spin things against their own city like a prophet of doom!

However, to conclude my offer to this thread.......

Here is the Board of Trade's latest report...

http://bot.com/Content/NavigationMenu/Policy/Scorecard/Scorecard_on_Prosperity_2010_FINAL.pdf

They are not known being soft on the City or the Province.

While they do uncover some problem areas (to be expected).......

Overall what we learn is this:

Toronto vs the World:

Generally in the middle or slightly above among major urban areas, in terms of economic performance
Generally in the top 5 in quality of life indicators (Labour attractiveness)

Whether we note an unemployment rate mid-9% range as below that of LA (11.4, Berlin 14 or above
London at 8.8 or Vancouver with 7.5)

OR we look at homicide rates:
Toronto 1.9 (per 100,000)
Vancouver 2.6
London, U.K 2.2
New York, 5.1
L.A. 8.7

Toronto comes out quite respectable.

When comparing the City with the suburbs we see

Higher employment growth in the CITY
Higher real growth in both residential and non-residential permits, * suburbs actually have declined in both
A tax burden only marginally higher in the City
Higher incomes in the City

Pfft.

Toronto is not in decline when compared with the world or with its neighbours.

Yes, there are things we can and should be doing better, but that's no excuse for doom-saying.

 

[Coltaine79]

Summary: BMO moving it's facilities likely has little to do with Toronto's tax situation - no matter how you spin it - that is, why they're moving out of downtown - you can argue, however, that other parts of Toronto should have been even more enticing i.e. some parts of Scarborough maybe. Rogers, this is a results of transaction that took place many years ago - you can argue that transaction has something to do with the high tax situation - but the key here, again, is where they decided to move - not MCC or other high density employment centers - so if jobs left downtown (which wasn't the case here) the same question comes up - other parts of Toronto are strugling.

AFAIK, BMO is not "letting go" of their BMT facility at 55 Bloor. It's simply combining the Direct Banking call centre (the phone number on the back of your debit card - these ppl used to be stationed at 55 Bloor) with the MasterCard call centre (separate team, used to be at one of the Sun Life buildings downtown) and moving both of them to a single consolidated location. There are plenty of other groups (some of whom bring in more revenue, justifying a high-rent facility) who can move in to the Manulife building. However, I'm pretty sure that BMO will end the lease on their SLFC office.

Now, I'm sure cost savings was a major driver for the move, but keep in mind that BMO is sort of "new" to the suburbs. They actually don't have any major offices in the 905, unlike RBC (who's been in Meadowvale for over half a decade now) and TD (ages). I think this is their first one. So it could be a desire to spread out in a geographical sense. Their major offices presently are downtown, Yonge-Shepp, and Scarborough (for I.T.)

I know some guys in Direct Banking... young guys/gals, not sure if they have cars. Pretty sure they live on the subway line... i have no idea how they're planning on getting to work. Will have to obtain the services of an automobile, I guess. Meadowvale is a shitty place to work IF you don't live in Peel Region AND don't have a car.

 

[taal]

Yep that sounds about right, I actually found an earlier press release regarding this - this isn't new information and has been in the works from 2008 at the very least:

http://www.finextra.com/news/fullstory.aspx?newsitemid=19385

This also seems to indicate they will keep some offices in their current location and consolidate from other downtown locations i.e. move more folks into the manulife location - but it doesn't sound like these will be *new* jobs:

The move will also allow BMO to relocate its card and retail payment services headquarter functions to the bank's Bay at Bloor Street offices to work alongside colleagues with similar roles in the commercial division.

 

[Glen]

I just wanted to add .. we talk a lot about the property tax in toronto for businesses. One thing that isn't mentioned as often, is the provinces business education tax - which is disproportionally higher in Toronto compared to the rest of the GTA (even though it doesn't cost anymore to provide these services for the city proper) - there are plans to lower this by 2014 from what I recall but this also contributes to this imbalance.

I'm not really sure of the history behind this i.e. why was it ever higher in Toronto in the first place.

While we're at it, let's take a look at some of the differences:
Toronto
TYPE CITY EDUC TOTAL
Residential 0.5895702% 0.2410000% 0.8305702%
Commercial General 1.9367482% 1.6615560% 3.5983042%

Missi
TOTAL
Residential RT 0.982115%
Commercial CT 2.384381%

Markham TOWN REGION EDUCTION TOTAL
Commercial - Occupied 0.310127 0.603598 1.385926 2.299651

Brampton: TOWN REGION EDUCTION TOTAL
Commercial: 0.627007% 0.645782% 1.439162% 2.711951%


So on average, we're talking about a 1% difference between Toronto and it's nieghbours about 1.5 times greater overall.

Now check this out, a nice summary for 2009:
http://www.city.vaughan.on.ca/images/stories/business/pdf/Comparative%20tax%20rates%20commercial%202009.pdf

The Toronto rate cited there seems higher then the current rate so I'm not sure how accurate it is but it gives you a good idea anyway ... interesting how the Kitchener / Waterloo area has extremely high tax rates ... something seems suspicious above those figures.

It looks like the education component can account for about 20/30% of the disparity but rest is Toronto's doing.

Toronto's residetial tax rate is anywhere from .1 to .4% lower.

So at the end of the day, does this imply Toronto's rent will be 1% higher just to account for the tax difference ? There will be many other differences in rental rate due to location / demand ... so on.

Taal

The difference between a Mississauga's commercial tax rate(inc. BET) and Toronto's is 52% not 1.2%.

 

[Glen]

Northern Light,

Talk about spin, you can't even see when CMA stats are used vs. city ones.
BTW Toronto's unemployment rate is 10.4%.
http://www.toronto.ca/business_publications/pdf/2010-may.pdf

 

[that_girl_there]

I don't know but I really didn't see evidence of widspread unemloyment in the Toronto while we were going through a recession. My friends and I get together and talk about this and yet we've continued to see shopping malls overflowing with people spending and theatres packed and restuarants and clubs drawing crowds.

Ah tkip, how I've missed your anecdotal evidence. Your friends and you aren't recent grads struggling to find employment. My friends and I notice that the economy is struggling. I was in a co-op program in University and my last co-op term (last summer) was the hardest one to find a job. I was lucky to get temporary work after graduation but my searchings for anything beyond are proving quite difficult.

Stores seem to have been having non-stop sales since the economic problems began. That's encouraging people to shop.

 

[nfitz]

Stores seem to have been having non-stop sales since the economic problems began. That's encouraging people to shop.

Judging by the prices I saw yesterday in The Bay - my first trip in (at least further than the cookies and candies downstairs) since Christmas ... then the non-stop sales have ended!