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  #1  
Old Posted Jan 27, 2012, 2:28 PM
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The GTA Economy

A thread devoted to all economic news related to Toronto and the GTA. Feel free to post news articles, discuss topics, whatever.

One request, could we keep the condo news separate, as the rest of this forum is pretty condo-centric it would be nice to have a place where we can discuss the actual economy not the health of the residential market.

Last edited by LeftCoaster; Jan 27, 2012 at 6:06 PM.
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  #2  
Old Posted Jan 27, 2012, 2:52 PM
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^ No it isn't. International finance is what's keeping Toronto afloat.

I hope aA doesn't touch another building that will be making an impact until their architects go back to kindergarten and find some creativity.

My 4 year old cousin can take a jenga block and plop it down somewhere. Maybe aA is hiring interns?
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  #3  
Old Posted Jan 27, 2012, 3:06 PM
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Quote:
Originally Posted by LeftCoaster View Post
Actually it's oil that is keeping Toronto afloat too. Much of the growth of the finance sector over the last decade has been riding on the coat tails of investment in Alberta.

Toronto relies on the oil sands almost as much as Alberta.

That was supposed to be our secret.

What gives guy?
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  #4  
Old Posted Jan 27, 2012, 6:04 PM
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Originally Posted by Ramako View Post
I'm a lawyer and my brother is in real estate investment. We're both based in downtown Toronto and have no direct involvement in the oil sands, but you can bet that the majority of our investments are in oil, gas and drilling companies based in Alberta.

Wealth and income flows from one industry to another in a multitude of ways. It's not as black and white as you're making it out to be.
Who is disputing that? It's also not the only game in town though. To say it's the key factor of Toronto's economy makes absolutely no sense. Oil is not the only thing that we get out of the ground.
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  #5  
Old Posted Jan 27, 2012, 6:06 PM
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Quote:
Originally Posted by LeftCoaster View Post
A thread devoted to all economic news related to Toronto and the GTA. Feel free to post news articles, discuss topics, whatever.

One request, could we keep the condo news separate, as the rest of this forum is pretty condo-centric it would be nice to have a place where we can discuss the actual economy not the health of the residential market.
Great idea LC.
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  #6  
Old Posted Jan 27, 2012, 2:28 PM
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Originally Posted by caltrane74 View Post
Toronto is not Ontario.

Toronto is actually leading the Canadian cities on combined economic indicators as per CIBC. No oil here so the only thing that keeps us afloat is pure unbridaled capitalism, sheer numbers and forces of will. Of course the fact the global elite are all parking their money here helps too.
Actually it's oil that is keeping Toronto afloat too. Much of the growth of the finance sector over the last decade has been riding on the coat tails of investment in Alberta.

Toronto relies on the oil sands almost as much as Alberta.

Last edited by LeftCoaster; Jan 27, 2012 at 6:07 PM.
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  #7  
Old Posted Jan 27, 2012, 6:22 PM
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First off let me apologize for saying you were unwilling to discuss this rationally, it was uncalled for. i did it because you seem to be twisting what I am saying and ignoring key points what I am posting which I find extremely frustrating. Perhaps it is my fault for not properly articulating my argument. i will try to be very clear here, and do not mistake it for me patronizing you, I am just trying to be as clear as possible to avoid any confusion.

Moving on, let me be very clear I am not saying that the entire Toronto economy is running off the oil sands, not even close. Toronto's economy is quite healthy and diverse, you will never catch me arguing the inverse.

What I did say was that the majority of the growth of the finance sector has been thanks to the oil sands. I dont have hard evidence to back me up, but I just finished a degree where the majority of my peers are now working in finance, predominantly i-banking and consulting, and when we talk shop the majority of what they are working on is energy related. It is somewhat logical however that this is true if you consider the following:

No doubt there is a ton of mining and traditional commerce functions still being performed by the banks, but those industries have not seen major growth lately so they have stayed at similar sizes within the banks. An industry that has seen major growth in Canada however is the energy sector, and hence where the banks have seen major growth is in the energy sector. So while the traditional areas are still important, much of the growth of our financial services has been due to energy.

An example, say the bank employs 1,000 people in year 1, 800 in traditional markets and 200 in energy and in year 2 they employ 1200 people, 850 in traditional markets and 350 in energy. The banks still saw good growth and are still healthy in their traditional markets, but the majority of their growth has come from energy.

Now this is just the banks sure, but it is important to note that there are a few top down industries in every economy, that fuel many of the other industries. In Calgary it is O&G, in Vancouver it is Mining and in Toronto the largest of these industries is finance. And while not everyone is working in finance the majority of Torontonians owe their employ to finance, as most other white collar professions work along side the banks, the entertainment industry is supported by wages of bankers and said white collar workers, construction workers build the condos for the white collars entertainment industry etc... It all trickles down from the upper industries.

So while without the oil sands I think Toronto's economy would still be fine as it is diverse and healthy, I'm saying that the majority of the exceptional growth we have seen lately is due to the oil sands. And that isn't a bad thing, it is important for cities to capitalize on booms like this, and the fact that Toronto can from thousands of miles away is amazing IMO.
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  #8  
Old Posted Jan 27, 2012, 6:46 PM
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Did you even read this example I gave? I never said the banks were not diverse:
Quote:
An example, say the bank employs 1,000 people in year 1, 800 in traditional markets and 200 in energy and in year 2 they employ 1200 people, 850 in traditional markets and 350 in energy. The banks still saw good growth and are still healthy in their traditional markets, but the majority of their growth has come from energy.
This is what I'm talking about that is so frustrating about ignoring KEY points I'm making. I never said that Canada's banks are no diverse, I just said that the high growth industry right now fueling the growth in the banks is energy. Their existing and previous growth engine industries are still there, but they are just not growing like they used to.

Also it is important to note that investments are just one of the key components that make up at Tier 1 bank. The majority of the sought after jobs in a bank are in their client advisory positions, which involve performing M&A transactions, issuing debentures and equities, and general consulting, which provide the bulk of employment and spin off employment in the Toronto finance world. Where the bank has invested its capital actually provides far less employment to Toronto than the other services provided by banks.
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  #9  
Old Posted Jan 27, 2012, 7:01 PM
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Quote:
Originally Posted by LeftCoaster View Post
Did you even read this example I gave? I never said the banks were not diverse:
Yes I saw your post, and even you just proved in it that the energy sector does not represent the lions share of growth or performance at the banks. Why is it so tough for you to see that the reason the big banks are doing well and have remained strong is that they've managed to keep a well diversified portfolio of investments. 1000 or 2000 new jobs a year is great but even still that represents only about 3%-6% of the new workforce entering the the city. That number is based on Toronto's roughly 100,000 new residence each year and if only half of them find work.
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  #10  
Old Posted Jan 27, 2012, 10:05 PM
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Ya lost me there. 1000 - 2000 jobs? My example was of a hypothetical bank with total employment of 1,000.

Maybe you need to re-read it?
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  #11  
Old Posted Jan 27, 2012, 10:50 PM
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Actually I'm going to bow out as I'm not going to pretend to be an expert on the subject and I'm to busy working on a render for a client right now. I will leave on this note though; Investment Banking dealing with the Oil Sands is not the only game in town. There are many more gears in Toronto's economic engine that have zero dealings with what's going on in Alberta. To ignore that is to say that we as a Torontonians are not capable of moving forward and growing without cashing in from the oil-sands. It also implies that we Torontonians that work in other fields are contributing less to the Toronto economy then some black tar out west. You've yet to prove that to me. There is a reason why Toronto has been able to continue to grow along with the rest of the Golden Horseshoe, diversity of it's people and of the industries they work in. The Tar sands are good for business here but to give them sole credit for our construction boom is to dismiss all the other great achievements that have been made by other industries in the region.

And lets not forget one HUGE factor for the downtown condo boom, generation X first time buyers looking to get out of the burbs and into the core.

Last edited by Andrewjm3D; Jan 28, 2012 at 7:07 PM.
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