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(DON EMMERT)
(DON EMMERT)

Economy Lab

Canada's cities score poorly on economic rankings Add to ...

Canadian cities often do well in international rankings of livability. For example, Vancouver sits fifth, tied with Dusseldorf, Germany, on consulting firm Mercer’s latest rankings, behind Vienna, Zurich, Auckland, and Munich. Ottawa and Toronto make the top 20. Montreal is 22nd.







But fresh air, green space and bike paths appear to have little to do with economic dynamism.

More related to this story







The Brookings Institution’s l atest scoring of the economic performance of the world’s largest metropolitan areas is a remarkable snapshot of a fast-changing world. And Canada is getting left behind.







Brookings’ list includes the 200 largest metropolitan areas -- not simply the city proper, but surrounding suburbs, towns and villages that represent an integrated regional economy -- as measured by gross domestic product in 2007. The think tank’s measure of economic performance is based on the growth rates of GDP per capita and employment. Tokyo is the biggest metropolitan area in the survey with a GDP approaching $1.4-trillion. Hamilton is at the opposite end, with a GDP of less than $100-billion.







The good people of Hamilton might be happy simply to be mentioned among the world’s major metro centres. For Canada, that’s where the good news ends. Calgary is the highest ranked at No. 51. Edmonton is 60th, Vancouver is 76th, and Toronto is 79th.







Little old Hamilton cracks the Top 100 at 83rd. The same can’t be said for Ottawa and Montreal, whose economic performance in 2011 is ranked 109th and 120th respectively. No other Canadian cities were included on the list.







Many will shrug at the Brookings results. Another arbitrary ranking: So what? Except that cities are the basis for most of the world’s economic activity. The 200 metro areas in the ranking account for nearly half of the world’s GDP, according to Brookings. Entrepreneurs will be attracted by the fastest economic growth. That means those places also will be the ones that generate jobs.







Incredibly, 90 per cent of the world’s fastest growing metropolitan economies are outside North America. The Top 10 is dominated by three countries: China, Saudi Arabia and Turkey. Santiago might be the biggest surprise on the list, ranking ninth. First is Shanghai, the emerging Asian financial centre. Second is Riyadh; third is Jiddah; fourth is Izmir, Turkey; fifth is Hangzhou; sixth is Ankara; seventh is Istanbul; eighth is Shenzhen; and tenth is Shenyang, China.







No rich world city appears until No. 19, where Houston squeezes between Casablanca at 18 and Kuala Lumpur at 20. The second North American, Western European or Japanese city to make the list is Stuttgart, Germany at No. 31.



Emilia Istrate, one of the study’s authors, said the results shouldn’t be read as a negative for Canada. The seven Canadian metro areas that Brookings follows have recovered fully from the global recession, something that can’t be said for many U.S. urban centres. Ms. Istrate also attributed the relative strength of some U.S. border cities to their trade links with Canada.







The strength of the report is that it pinpoints poles of economic growth. Rather than feel threatening, Canadians, Americans and Europeans should seek to establish stronger links with these metro areas, which are the engines of growth in their respective countries, Ms. Istrate said in an interview.







“It’s important for decision makers all around the world to realize they have to connect the growth at the national level to what is happening on the ground,” Ms. Istrate said. “Growth doesn’t happen on the national level, it happens at the local level.”







The Brookings list is a graphic demonstration of what is perhaps Canada’s biggest economic challenge: competitiveness. This is one of the reasons the Bank of Canada is keeping interest rates at emergency levels. The central bank said after its latest policy decision Tuesday that it expects exports to add little to economic growth, “reflecting moderate foreign demand and ongoing competitiveness issues, including the persistent strength of the Canadian dollar.”







Even when factoring out the faster growing emerging markets, Canada still fares poorly. Besides Houston and Stuttgart, the economies of Dallas; Stockholm; Rochester, New York (yes, Rochester, New York!); and Braunschweig-Wolfsburg, Germany all rank ahead of Calgary. Four German cities, Seoul, Guadalajara, Mexico, and Saint Petersburg separate Calgary and Edmonton.







The point: even among its direct peers, Canada fails to stand out.







Calgary and Edmonton are benefiting from the commodities boom, but Houston and Dallas are doing better. Canada’s manufacturing core of Hamilton, Toronto and Montreal have nothing on German cities, and they even trail the likes of Rochester, Milwaukee, Wisconsin; and Buffalo, New York.







And as great as life is in Vancouver, business is better in San Jose, Seattle and Austin, Texas.

Follow on Twitter: @CarmichaelKevin

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