Employment and wealth generation are fundamental to the economic vitality and long-run livability and well-being of urban regions. The Central Ontario Zone is home to a large and dynamic collection of economic activities that, taken together, dominate both the provincial and national economies. This report analyses the zone's economic structure and recent development to inform a smart growth strategy for Central Ontario. Accordingly, it addresses the following questions:

  • What is the structure of the Central Zone economy and how is it changing?
  • What kinds of economic activities are locationally flexible and what kinds of locations within the region might they be attracted to?
  • To what extent can the location of new economic activities and the retention of existing economic activities be influenced within the Central Ontario Zone by planning policy and other growth management instruments?
  • What kinds of policies and supporting measures would have to be put in place to influence locational decision-making of businesses?
  • What approaches might be adopted in a smart growth strategy, and what supporting measures and principles put in place, in order to attract new economic activity to the Zone?

The economy of Central Ontario should more accurately be thought of as several distinct but inter-related regional and local economies. The economy of the Greater Toronto Area is by far the largest and most diverse within the Zone. The regional economies of major urban centres -Hamilton, St. Catharines-Niagara, and Kitchener-Waterloo-Cambridge - constitute the next tier. At the next level down are local economies centred on smaller cities such as Guelph, Barrie, Peterborough, and Brantford. Finally, there are many small towns surrounded by largely rural areas that have economies dominated by agricultural, tourism, and recreational activities.

Owing to the rather extended nature of its boundaries, the Central Zone economy as defined by the Smart Growth Secretariat has not been the subject of much systematic empirical analysis to date. This means that, in order to document its economic structure, one must largely rely on analyses conducted at two other geographical scales: the Greater Toronto Area1 and the Province of Ontario.2 The following discussion leans heavily on a substantial body of recent work, supplementing it where possible with information provided by the Smart Growth Secretariat pertaining to smaller regional and local economies in the Central Ontario Zone. This analysis is also informed by the author's past and ongoing research in Southern Ontario on foreign direct investment, and on the emergence and evolution of innovative industries and clusters.

1. ICF Consulting, GHK International, Metropole Consultants, WEFA Canada, and Meric Gertler, Toronto Competes: An Assessment of Toronto's Global Competitiveness, prepared for Toronto Economic Development Office and the Ontario Ministry of Economic Development and Trade, 2000; M.S. Gertler, A Region in Transition: The Changing Structure of Toronto's Regional Economy, Toronto: Neptis Foundation, 2000; M.S. Gertler, "Self-determination for Toronto: what are the economic conditions and do they exist?" in M.W. Rowe, ed., Toronto: Considering Self-Government, Owen Sound: The Ginger Press, 2000, pp. 33-53; D. Drummond, D. Burleton, G. Manning, and K. Richardson, The Greater Toronto Area (GTA): Canada's Primary Economic Locomotive in Need of Repairs, Toronto: TD Economics Special Report, Toronto-Dominion Bank, May 22, 2002; D. Pecaut, "Setting a course for the future," Toronto City Summit, Rotman School of Management, University of Toronto, June 26, 2002.
2. Institute for Competitiveness and Prosperity, A View of Ontario: Ontario's Clusters of Innovation, Toronto: Working Paper No. 1, April 2002, and Measuring Ontario's Prosperity: Developing an Economic Indicator System, Toronto: Working Paper No. 2, August 2002.