If you ask Les Liversidge why he left Toronto for Markham, he is quick to answer: "It was the business taxes, principally the tax bill on the building itself that did it."
Four years ago, the 55-year-old lawyer owned a building in north Toronto out of which he ran a small firm that practised occupational safety and workers' compensation law. His dilemma was property taxes -- they had gone through the roof.
Taxes are one factor -- albeit a major one -- that have helped push the city of Toronto down the list on
the FP/ Canadian Federation of Independent Business rankings of entrepreneurial cities. Toronto is now dead last on a list of 96, while suburban Toronto, known as the 905 district, sits at 33. The evidence is clear that businesses, some with a need to stay close to Toronto, are opting for the suburbs.
At one point, Mr. Liversidge said he was paying $4,000 to $6,000 in taxes on the 1½-storey building he occupied from 1992 to 2005, but a new assessment on the property put the tax at $65,000 to $70,000. Increases were capped by legislation but, even with the cap, his bill jumped to $27,000.
He could see the writing on the wall.
Mr. Liversidge owned a property that was only going to get more expensive to run.
There was no decision. He picked up his practice, which includes four employees, and moved to Markham -- about seven kilometres away.
While the city can point to a few real estate projects that show business is still coming to Canada's largest city, the hard statistics show it's moving out to the suburbs.
Real estate company Cushman & Wakefield Ltd. says in 1986 the inventory of office space in the central area of Toronto was 59.7 million square feet.
It has since grown to 82.3 million square feet. By comparison, the suburban market real estate inventory jumped from 38.8 million square feet in 1986 to 83.3 million square feet today.
Judith Andrew, vice-president, legislative with the CFIB, said in her group's rankings Toronto has been slipping because it is not doing well when it comes to policy issues.
The survey scores, which are based on interviews with CFIB members, found respondents giving Toronto low marks for the cost of local government, government sensitivity to local business, local government regulation and local government tax balance.
"One of the problems with Toronto is it has a real penchant for regulating" Ms. Andrews said.
"There are always new regulations in the works. It's not surprising then that Toronto gets a bad rating on regulation."
The survey found 69% of respondents said regulation and paper burden were cause for concern in Toronto. Compare that to Saskatoon, which finished first overall in the survey.
Only 58.2% of respondents in the Saskatchewan city say it's an issue.
"There are a lot of regulations in the city that are not in other municipalities, whether it's restaurant ratings or regulating retail establishments of a certain size having to have a public washroom. On and on it goes, they always have to have a new idea," she said.
The impact has been more and more jobs migrating to the suburbs. "Toronto is becoming the bedroom community for 905," Ms. Andrew said. "Look at the statistics. Unemployment is higher in Toronto than it is outside."
Worse yet, there is very little confidence conditions are going to improve. "The city of Toronto's spending is increasing exponentially," she said. About the only category Toronto does well on in the survey is the diversity of its businesses.
Don't tell anybody at Telus Corp. that Toronto isn't the place to be. The Vancouverbased telecommunications giant is moving into a brand new building called the Telus Tower next month. It will move nearly 2,000 employees into the 30-storey building in the heart of downtown Toronto.
"For us there were two things," said Andrea Goertz, vice-president of enterprise solutions with Telus. "It's very close to our customers, close to the downtown core. It's very convenient to our team members, close to buses and close to the trains."
Telus is moving employees from 15 locations into the new location while it keeps a separate call centre in Scarborough.
The company could have consolidated in the suburbs but for a western-based company trying to make a splash in Toronto, the downtown core will always have a certain cache.
"For us it's a central, high-profile location," Ms. Goertz said.
"It was important that our employees have an environment where they could really thrive with the culture of the city. It was a consideration that played into our decision to be in the downtown core. We want to be part of the presence that is Toronto."