Thank you, and I'd like to thank the committee for this opportunity. I'd like to start off as my colleague down the table did, with a note of thanks. We'd like to favourably comment on the recent announcement by the federal and the Ontario governments to cooperate on integrating and harmonizing corporate tax collection in Ontario. It's going to save businesses a lot of red tape, it's going to simplify the system, and it's all going to be done without any net loss in tax revenue to either government. So it sure looks like a win-win-win to us, and evidence of smarter taxation and better government. I'd like to be on record in commending the governments for making that move.
We think that in the upcoming budget the federal government has an additional opportunity to encourage economic growth and success in Toronto. We've outlined in our submission actions that we believe will benefit the Toronto economy, and we think that by boosting the Toronto economy, the benefit will be felt across Canada.
Canada's competitiveness is dependent on large cities as the prime creators of jobs, opportunity, and economic activity. One example is that the nation's nine largest cities, home to about 50% of Canada's population, were home to 65% of the net new jobs created between 1996 and 2002--an example, we think, of cities punching above their weight in economic terms.
Cities are also the major source of federal tax revenue. In 2002, the federal government realized a $20.6 billion surplus with the nine largest cities while recording an $11.6 billion deficit with the rest of the country. The lion's share of those revenues comes from Toronto. Since 2000, Toronto taxpayers have contributed an average of some $20 billion a year to the federal government. With per capita federal revenues from Toronto rising faster than the city's GDP and per capita spending on behalf of Torontonians falling further behind the national average, the economic engine of Canada is being slowly starved of fuel.
To its credit, the government has recognized that fiscal imbalances do have a municipal dimension, and our submission calls on the federal government to make good on its commitment so that all levels of government in Canada have the resources they need to provide the services they are obliged to offer. Put bluntly, cities need a larger share of the fiscal pie. We're looking to the federal government to ensure that happens.
Whether through increased federal investment or decreased federal taxation, Toronto and its business community need additional resources to address some of the largest impediments to competitiveness—traffic congestion and taxation.
On traffic congestion, a recent Transport Canada study put the cost to the greater Toronto area at $1.8 billion a year. We think that's a conservative estimate. A recent survey of CEOs in Toronto identified traffic and transit issues as their top concern. A strong majority of business leaders agree with transportation experts that increased investment in public transit is key to addressing the city's competitiveness and economic development challenges.
The federal government has in recent years taken significant steps to increase its support for public transit. Whether that's been through gas tax revenue sharing or through infrastructure funding, the picture is improving. However, even with these initiatives, the federal government addresses only a small portion of the need and plays a smaller role in urban transit than its resources would allow or national policy interests require. Canada remains the only G-8 country without a nationally funded urban transit program.
On taxation, the government should continue its effort to reduce corporate taxes in order to help the business community in Toronto and across the nation to be more competitive. We have made progress, but more needs to be done. Our brief has recommendations on how that could happen.
From the Toronto perspective, we believe including municipalities in intergovernmental financial negotiations, reducing the tax burden on the business community in order to encourage investment, and increasing its own investment in public transit would address the fiscal imbalance in the most productive ways possible.
Our written submission goes into considerable detail on the rationale for and the expected positive results of these steps, along with a renewed call for commitment to the development of the next generation of skilled workers in Canada. I commend the submission to the committee for its review and thank you for your time and attention.