Economic History of Toronto City - Case Study Example

Economic History of Toronto Economic History of Toronto Introduction Canada is one of the countries of the world that has many cities. The cities have unique characteristics. One of the main cities of Canada is Toronto (Historica Canada, n.d.). The city boasts of significant changes and development in the history. As it is, Toronto is the fourth biggest city in North America (Historica Canada, n.d.). It also boasts as the Canada largest municipality comprising of earlier cities such as North York and Scarborough. There are other unique features of the city. Some of the features include large number of immigrant population, acts as a center for both national and international finance, as well as unique cultural life (Historica Canada, n.d.). Hence, it is clear that the city plays a significant role in the well-being of the whole of Canada. The city has also been linked with a variety of economic developments. Moreover, the city had certain features during the major world wars and the time of recession. The paper looks at the economic history of Toronto city. Economic History of City Toronto has a lengthy history of development. The city is described as a port city due to location on Lake Ontario (Mokyr, 2003). The fine location of the city has been linked to the colonial officers (Mokyr, 2003). The British colonial administrators had a sway on the location of the city. Toronto dominance has been for a long time. In the middle of 19th century, the city was part of Canada’s main cities. The location of the city is between Lake Ontarion and Lake Huron (Mokyr, 2003). In the second decade of 18th century, the French developed a fort in the area for easy trade activities. It was meant to ensure that fur moved efficiently to the transshipment port of Montreal and not the southern part of New York (Mokyr, 2003). Further transformation of the city occurred in 1793. At this period, the governor of Upper Canada decided to transform the area as a military stronghold as well as political capital (Mokyr, 2003). The area was considered safe from attacks especially from new United States of America. Further changes were achieved through authority of the governor. For example, the governor authorized the construction of a road north from the village to enable movement in the navigable rivers. There was also rise of agricultural settlements. However, the population of this area remained small in which there were about 700 people in 1812. Afterwards, York continued to be a colonial capital. However, Toronto was made the capital of the province of Ontario with the Confederation (1867) (Mokyr, 2003). Influence of Confederation There were rapid changes after Confederation. The most notable change that took place was increased in settlement and clearing of agricultural lands after 1815. The change led to commercial developments, and the population of the town increased significantly (Mokyr, 2003). The population was estimated to be about 4,000 people by 1831. The other change was renaming of York into Toronto. At the beginning of the second part of 19th century, the population increase was experienced (Mokyr, 2003). In the period that followed, there was tremendous growth in the manufacturing sector. The sector comprised of various industries. Such industries included food processing, clothing, and iron and steel products (Mokyr, 2003). Tariffs on manufactured goods helped in increased profit of Toronto’s firms. These firms also had access to cheap electricity (Mokyr, 2003). The main source of electricity was through hydroelectric power generated at Niagra Falls. 20th Century and World War I Further development was noted at the beginning of 1900s in Toronto. Further resources were achieved in this era through opening of Ontario’s forest and mines. There were also increased trade activities. For example, there was increased rate of commerce. The increased production of electricity led to further economic growth as more factories emerged. Further developments were achieved in the First World War (Historica Canada, n.d.). There was an expansion in investment as well as manufacturing. For example, there was wide production of meat and arms. Prosperity continued in the 1920’s, and this led to increased population (Historica Canada, n.d.). At this time, the population in the city was estimated to be about half a million people. Great Depression The Great Depression affected the economy of Toronto in a significant way. In this era, most areas of Canada were affected. Hence, no city was spared from the subsequent events that occurred out of The Great Depression. Toronto was hit hard during this period. There was stagnation of economic growth as compared to what was happening in the past (Historica Canada, n.d.). The significant was the slow of construction as well as reduced rate of employment (Historica Canada, n.d.). These challenges were experienced up to year 1934. After this period, the employment rate began to improve though at a lower rate. The depression also led to a large crisis in the housing sector (Purdy, 2003). In this period, there was little or no growth in the housing sector. One of the causal factors to this challenge was the low wages paid to workers (Purdy, 2003). Moreover, majority of those in urban areas were unable to afford adequate housing (Purdy, 2003). As early as 1930s, Toronto was faced with an increase of poor housing conditions, lack of houses that could be afforded by many, and rise in social distress (Purdy, 2003). Later period, there was the rise in number of people with poor distribution of income, high unemployment, and poor land developments. Hence, there was the rise of destitute families. Lowest paid workers were unable to pay rents. Post World War II There were significant changes that took place after World War II. In this era, there was new hope for the city. One of the significant changes was the rise of the rate of employment (Frommers, 2014). There was also rise of major factories most of which were involved in the manufacture of goods. Most of the men in the city volunteered in these factories while women took their place in the factories. Moreover, there was the rise of the aviation sector. After the war, more prosperity continued to be achieved in the city. There was increased expansion of the city especially in the suburbs (Frommers, 2014). As early as 1950, there was increased growth of urban areas that sometimes led to disputes between the city and suburbs (Frommers, 2014). There was also rise of the need for social services as the population rose significantly. In addition, there was the rise of popularity of the city. In this era, Toronto became a major city in mid 20th century (Frommers, 2014). Hence, there was a need for proper planning and growth. A new structure that would guarantee planning and growth were established by Metro Council. After such a plan, there was evidence of growth. One of such growth occurred through opening of Yonge subway as well as construction of a network of highways (Frommers, 2014). As a result, the city was linked to prosperous suburbs. In this period, there was also rise of planned community towns. Examples include Don Mills and Yorkdale Center. The towns attracted major American companies that in turn led to further growth. In subsequent years, there was even more transformation. For example, in 1970, Toronto was ranked as the fastest growing city in North America (Frommers, 2014). Large companies became even more attracted to the city as compared to neighboring areas such as Montreal. The city also became a leading financial sector and pride of having more corporate headquarters (Frommers, 2014). Moreover, the stock market became dominant, and the city also remained the nation prime publishing center. Major industries of the city and the prospects for long-term growth Toronto boasts itself of major industries. There are a number of industries in the city that makes the region vibrant. The leading sector that has contributed significantly to the success of the city is bank. Other sectors include insurance, securities, and other financial services (Flavelle, 2013). The sector helps to the success of the city economy as they provide well-paying jobs. The city also boasts of good and stable financial market. The sector is described as providing employment to about 230,000 people in Toronto working as bank tellers, insurance agents, or head office staff (Flavelle, 2013). The other important area is that of manufacturing. Manufacturing adds more economic value to the city. The sector contributes about $36 billion to the city’s gross domestic product (Flavelle, 2013). The city has also been successful in mining sector. The city boasts itself as the mining industry financial capital of the world (Flavelle, 2013). There are other key industries in the city. One of such industries is the biomedical and biotechnology (Toronto, n.d.). This has also led to development of various research institutes. There is high probability of growth in the city. For example, the construction sector is expected to grow as the city prepares for 2015 Pan Am Games. Recessions The city was affected during slump. The city was hard hit in the manufacturing g sector in the third quarter of 2008 up to 2009 (Toronto, n.d.). However, the problems did not last for long. The economy improved in 2009 registering a GDP growth of 3.9 percent (Toronto, n.d.). As a result, there was renewed hope in the manufacturing, construction, and wholesale and retail trade (Toronto, n.d.). However, there was a further dip in 2011. This was blamed for the conflict in the global economy and poor customer spending (Toronto, n.d.). The economy growth reduced at a highest rate in 2013 registering 1.8 percent (Toronto, n.d.). However, the housing sector was resilient (Toronto, n.d.). This helped to cushion areas such as the finance, insurance, and real estate sectors (Toronto, n.d.). Conclusion It is clear Toronto City economy has been an influence on bigger Canada. The economy development, as well as the growth of the city, has taken for a long time. The development can be linked to the rise of colonialism. The good location of the city may also be linked to rapid developments that took place in the city. Confederation also helped in the development of the city as more land was cleared, and new industries emerged. However, development decreased as Depression started. The effect was reduced wage and rise in unemployment. Therefore, people were challenged in various areas especially in the housing sector. On the other hand, World War II helped in overcoming these challenges. In this era, there were more jobs as well as rise of industries. The period that followed saw a growth of the city. The only challenge that the city experienced was during recessions. The city growth slowed. However, there is hope for more growth in the future. References Flavelle, D. (2013). Banking is Toronto’s key industry, report says. Retrieved 06 February 2015 from http://www.thestar.com/business/economy/2013/11/20/banking_key_toronto_industry_report_says.html. Frommers. (2014). History. Retrieved 06 February 2015 from http://www.frommers.com/destinations/toronto/717104#sthash.ClhZ0ofN.dpbs. Historica Canada. (n.d.). Toronto. Retrieved 05 February 2015 from http://www.thecanadianencyclopedia.ca/en/article/toronto/. Mokyr, J. (2003). The Oxford Encyclopedia of Economic History, Volume 1. New York: Oxford University Press. Purdy, S. (2003). “It was tough on everybody”: Low-income families and Housing Hardship in Post-World War II Toronto. Journal of Social History, 457-482. Toronto. (n.d.). Profile on Toronto. Retrieved 06 February 2015 from https://www1.toronto.ca/City%20Of%20Toronto/Strategic%20Communications/City%20Budget/2014/PDFs/Public%20Book/PROFILE%20ON%20TORONTO%20-%20MARCH%2024%202014.pdf. Read More