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Traffic congestion in the Toronto region costs Canada $3.3-billion in lost productivity a year, the result of urban sprawl, decades of underinvestment in public transit by Ottawa and a disjointed system, the Organization for Economic Co-operation and Development says.

In a first-of-its-kind review of the region's economy, the OECD said transit service in the Toronto Census Metropolitan Area has not kept pace with population growth, with 71 per cent of commuters still dependent on the automobile - one of the highest rates of car use among cities in the organization's 30 member countries.

The result is air pollution, some of the longest commutes among OECD countries, and "a direct hit on productivity," especially in economic sectors that depend on rapid delivery such as retail, logistics and food.

To curb traffic jams, the Toronto region should consider measures such as toll lanes, local fuel and parking taxes, and a Singapore-style congestion charge in which roads in the city centre and major routes such as the 400-series highways would be subject to fees that vary according to peak hours, the OECD says.

Although the Toronto region is one of Canada's "chief economic powerhouses," the report says the area's gross domestic product per capita is middling compared to other OECD countries, while its rate of labour productivity is lower than most U.S. and European cities with comparable income levels, the report says.

That's due in part to the decline in manufacturing jobs, weak investment in innovation, a failure to capitalize on the skills of its immigrant population and a lagging regional transport network, the 200-page report notes.

Mayor David Miller said the OECD identified several concerns long expressed by Canada's mayors, including the need for a national transit strategy and revenues that grow with the economy.

"The OECD report makes it clear that if Ontario and Canada are to thrive, its largest urban centre … must not be taken for granted," he said.

Among the OECD findings:

  • Federal spending on transportation in Canada as a share of total government spending was the smallest compared to other OECD countries in 2005 and has marginally improved in recent years.
  • The Toronto region ranks 43rd out of 46 major cities for the amount of railway track it has per kilometre, one indicator of transit investment.
  • A regional approach to public transit, possibly led by the provincial agency Metrolinx, is required to integrate and make better use of the 11 separately governed agencies in the GTA and Hamilton area.
  • Despite renowned universities and research institutions, the region lags on innovation indicators such as patents, citations, high-tech employment and entrepreneurship. Universities and industry need to collaborate more effectively. Governments should invest in more initiatives like Toronto's MaRS Discovery District.
  • More should be done to capitalize on immigrants' international networks in order to expand Canada's global trade. Cities outside Toronto need to increase investment in affordable and rental housing that serves newcomers.

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