The president of the Board of Trade said it best last week in the midst of the Rob Ford disaster: the city no longer has a “Marketer in Chief.”
Yes, Toronto continues to function on a day-to-day basis despite our discredited chief magistrate. The problem is long-term: turning into the butt of a worldwide joke could cut dangerously into the city’s prosperity. It’s a strange turn of events for a mayor who electioneered on his business smarts, uses fiscal responsibility as his calling card and deems himself a champion of job creation.
Will we all end up paying the economic price for Ford’s lack of integrity?
To answer this, I surveyed a sample of local financial players, including an investment consultant, a hotel manager, a trade commissioner and people connected to Invest and Build Toronto.
None was comfortable speaking on record, but their collective conclusion was clear – if this crisis continues and the city is perceived to have an enduring leadership deficit, investment decisions could be affected. We are, after all, a metropolis dependent on enterprises outside our boundaries, and reliant to a lesser extent on tourism and talented immigrants.
Businesses and clever people have many opportunities in places other than here, and while most financial decisions are driven by nuts-and-bolts analyses, there is always a drive to quantify future risk factors.
Toronto has reasonable taxes, an educated workforce, good proximity to markets and decent infrastructure, but Ford’s travails are creating a sense of crisis and instability, and the longer that goes on, the more unattractive we become.
Objectively, the mayor’s activities – from murder-threat rants to drunken stupors – should not affect investments, but there are always factors in decision-making, my sources say, that aren’t based only on hard facts.
One compared Toronto to Italy, where former prime minister Silvio Berlusconi became a block to the influx of large-scale capital. Companies worried about the government’s ability to rise above distractions to make long-term decisions.
The case of Japan also came up. Political infighting and the government’s failure to work with opposition forces led to continuous instability over the last 20 years along with neglect of reforms to keep the country competitive, an issue now being corrected.
The fact that the Board of Trade – which has egged on the mayor in his privatization battles and backed his push for low property taxes for businesses – would express its nervousness about the spectacle Ford has become underlines the problem.
National and provincial governments set economic policy, while municipal ones establish local enabling mechanisms. So if councils are paralyzed, the services that business depends on can go into decline. And for all its collective intelligence, Toronto’s council is stuck when it comes to many issues. That’s partly because our low-functioning mayor isn’t able to unite various factions for the sake of effective decision-making. The worst thing for government is treading water – think the dysfunctional LRT/subway debate.
It’s impossible to know where the Ford situation will go next. But it’s conceivable that the longer he stays at the helm and the more likely his re-election, the iffier Toronto’s economic climate will be.