Good afternoon.
My name is Juan Gomez. I'm the director of policy for the Toronto Board of Trade. Thank you for inviting me to appear this afternoon.
Founded in 1845, the Toronto Board of Trade is Canada's largest chamber of commerce, connecting 10,000 members and more than 200,000 business professionals and influencers throughout the Toronto region.
Next year, we'll be celebrating our 125th anniversary. The board advances the success of our members and the entire region by facilitating opportunities for knowledge sharing, networking, business development, and city building.
At the outset, I want to stress the importance of Canada's major city regions to the strength and vitality of our national economy. In the case of the Toronto region, its assets are a diverse economic base and robust labour and consumer markets. Accounting for about 45% of Ontario's and 20% of Canada's GDP respectively, the Toronto region's weight in national terms is comparable to that of other leading world cities. By way of comparison, greater London accounts for 19% of the U.K.'s total output, while the metro New York region produces almost 9% of American GDP.
Maintaining this economic dynamism is not easy, especially within an economic environment characterized by considerable political and economic uncertainty in key export markets like the U.S. and Europe. Key to the success of our region's and nation's economy is having both a credible fiscal plan and a clear strategy to drive private sector growth. As events in the U.S. and Europe demonstrate, not having a credible fiscal plan becomes a drag on economic growth, increases debt servicing cost, and threatens the ability of governments to pay for vital investments in human and physical capital. At the same time, without a clear strategy to drive private sector growth, government revenues are jeopardized, as is our ability to grow our economy.
Building our nation's economic competitiveness, and in particular our ability to compete globally in attracting foreign inward investment and acquiring new export markets must be a central focus of the budget and its spending priorities.
From the board's standpoint, a critical pillar to ensuring Canada's economic vitality is modern and well-maintained physical infrastructure. As economic research amply demonstrates, solid infrastructure is critical to business competitiveness and the success of our national and urban economies. We commend the government for recent infrastructure investments, including the federal gas tax fund, the economic action plan, and the Building Canada plan, and for making the gas tax fund permanent, all of which have strengthened Canada's infrastructure and economy. However, despite the progress made in addressing urban challenges, many still remain, whether it's public transit or physical infrastructure like roads and sewers.
Our first recommendation is to renew the Building Canada fund in order to support the infrastructure priorities of urban Canada. This should include maintaining the value of the gas tax fund to ensure it keeps up with rising costs. This could perhaps be achieved through an indexing or fixed percentage mechanism. We also see it as critical that there be long-term funding streams developed for core infrastructure like roads, ports, and public transit.
Our second recommendation is to ensure we build our nation's capacity to compete globally for trade and investment. Undoubtedly, successful negotiations on trade and investment agreements, including the European Union and India, and intensifying focus on high-growth countries in the Asia-Pacific region will directly benefit Canadian businesses and workers across Canada.
However, to fully take advantage of these opportunities, we must have firms that can compete with tough foreign competition and a business environment that is attractive to foreign direct investment. Critical to Canada's competitiveness is the strength of our regional business clusters. Clustered industries typically sell to markets beyond their local region and are more productive and innovative. For this reason, cluster-based strategies are an effective way to foster innovation, improve productivity, and strengthen the international competitiveness of Canada's regions.
We therefore invite the federal government, perhaps through FedDev Ontario, to work in partnership with the Toronto Board of Trade in carrying forward an important initiative we are now undertaking to grow and strengthen key clusters in the Toronto region, such as the food and beverage cluster and health and life sciences.