Ontario vs. New York

I always find it interesting to compare Ontario to New York State. In many ways, Ontario is for Canada what New York State once was in the United States. In some ways, the two are very much alike still. They're probably more similar than New York is to California or Ontario is to Alberta.

There are some stark similarities. Ontario, especially recently, has been a magnet for immigrants. Ontario contains what might arguably be Canada's most important city, Toronto. Toronto is the center of finance in Canada, just as New York City is the center of finance in the United States. Both Toronto and New York City are growing cities, able to continue to attract talented people from around their country to work in their sophisticated service economies. Both are experiencing real estate booms that are putting pressure on lower- and middle-income people. Likewise, both Ontario and New York have a conflict between urban and rural, big city and small city (this is represented in New York as upstate vs. downstate, and in Ontario as south vs. north, in a sense).

Nonetheless, there are stark differences. New York is growing very slowly, and many people are leaving it. Ontario, on the other hand is growing quite quickly. Some of this is explained by geography. New York is much smaller geographically, whereas Ontario encompasses all of the Great Lakes bordering Canada (bringing it as far west as Michigan and Minnesota). Much of the growth in both the State of New York and the Province of Ontario is explained by immigration, however. In terms of size and influence, Ontario is able to impact national politics much the same way New York once could. Ontario, indeed, is the only Canadian province with a larger population than New York City.

Ontario's urban population is moving to suburbs and exurbs, much like New York's is. The geographic constraints in Canada are different though. Canadians tend to live within a few hundred miles of the United States. As such, those who live urban Ontario are very likely to settle in rural Ontario. Those who leave New York State often pack up and head south or west (it's hard to go somewhere in the United States without meeting someone from Brooklyn). From CTV ("Cdns. choose urban sprawl in staggering numbers," 13-March-2007):

OTTAWA -- The environment may rank No. 1 in polls meant to tap the national consciousness but Canadians are choosing auto-dependent suburbs and exurbs over big city life in staggering numbers, the first major release from the 2006 census shows.

The trend, fuelled in part by young families seeking larger, yet affordable, homes outside of the urban centres from which they draw salaries, is raising concern among academics and environmentalists who say urban sprawl cannot survive the "carbon-constrained future.''

The 11.1 per cent population growth rate posted in peripheral municipalities, those that surround the core cities of Canada's 33 census metropolitan areas, more than doubled the national growth rate of 5.4 per cent, according to figures released Tuesday by Statistics Canada.

The fastest growing municipality was Milton, Ont., a classic example of an exurb -- a term coined in the 1950s to describe that place where affluent suburb meets countryside. Milton, some 55 kilometres west of Toronto, posted a 71.4 per cent growth rate with a population of 53,939 compared to 31,471 in 2001.

By contrast, the average growth rate for metropolitan core areas across Canada was 4.2 per cent while Toronto grew only 0.9 per cent.

First of all, don't call it urban sprawl. There's nothing urban about sprawl. But that aside, the fact that this trend is hitting Canada so hard now is rather alarming, given the rather recent realization on the part of many that dense urban cities actually do provide a degree of environmentally sustainability that newer suburbs don't offer. Cities use less energy per capita, even if they do use more per square foot. Cities allow people to transport themselves without automobiles, at least sometimes. The denser the city, the more to be gained from walking on foot rather than hopping into an automobile.

One sometimes has to wonder, why is Ontario growing, while New York is not? Well, part of the trend might be explained by the above. Ontario may be growing, but it isn't urbanizing. New York isn't growing, but it's not sprawling so much either. The small towns in the Hudson Valley allow workers to commute by train to New York City, whereas those going from the suburbs of Syracuse to downtown Syracuse are pretty much stuck driving. Likewise for a city in Ontario, outside Toronto (and Toronto's public transportation system is nowhere near as extensive as New York's).

Ontario, ironically enough considering Canada's undeserved reputation in America as socialist and economically rigid, probably has a much more friendly business climate. Ontario actually does pretty well attracting even manufacturing. In 2005, Toyota announced that it was going to open a factory there, instead of in the American South ("Toyota to build 100,000 vehicles per year in Woodstock, Ont., starting 2008," CBC, 13-March-2005):

Several U.S. states were reportedly prepared to offer more than double that amount of subsidy. But Fedchun said much of that extra money would have been eaten away by higher training costs than are necessary for the Woodstock project.

He said Nissan and Honda have encountered difficulties getting new plants up to full production in recent years in Mississippi and Alabama due to an untrained - and often illiterate - workforce. In Alabama, trainers had to use "pictorials" to teach some illiterate workers how to use high-tech plant equipment.

"The educational level and the skill level of the people down there is so much lower than it is in Ontario," Fedchun said.

In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson.

"Most people don't think of our health-care system as being a competitive advantage," he said.

Tanguay said Toyota's decision on where to build its seventh North American plant was "not only about money."

"It's about being in the right place," he said, noting the company can rely on the expertise of experienced Cambridge workers to help get Woodstock up and running.

That's pretty damning really. But New York State doesn't have a workforce as uneducated as that in the south. If anything, the old manufacturing workers who have lost their jobs are perhaps pretty skilled. Perhaps their skills are outdated, and maybe it would be hard to re-train them.

Either way, it appears to me that New York isn't even trying to attract these kinds of jobs. It's not entirely at a competitive disadvantage. It's been more than willing to unload subsidies on behemoths like IBM and Kodak, not to mention New York City's financial heavyweights.

It's been unloading subsidies on high-tech firms as well. Joseph Bruno had this in a press release on June 26, 2006:

Senate Majority Leader Joseph L. Bruno joined Dr. Hector Ruiz, Chairman and CEO of Advanced Micro Devices (NYSE: AMD), Governor George Pataki, Assembly Speaker Sheldon Silver and Congressman John Sweeney today to confirm that AMD has selected the Luther Forest Technology Park as the site of their next semiconductor manufacturing facility. This announcement is one of the largest private sector industrial investments in New York State history and is projected to create more than 1,200 new high-tech jobs, thousands of construction jobs, and more then 3,000 jobs through businesses that will serve AMD.

Under the terms of the agreement, AMD would be able to construct a new, $600 million, 1.2 million square foot facility, equipped with approximately $2.6 billion in state-of-the-art tools designed to produce 300 mm wafers using 32mm process technology. Expenditures at the facility are projected to total more than $2 billion during the first five years of operation, bringing the projected total investment to $5.2 billion. The Luther Forest site in Saratoga County was selected by AMD after an extensive review of a number of sites nationwide and internationally. The agreement enables construction on the 1.2 million square foot plant to begin between July 2007 and July 2009 and be fully operational sometime between January 2012 and January 2014.

"Upon becoming Majority Leader 11 years ago, I made clear that my top priorities would be to support economic development and job creation initiatives that would allow the Capital Region and New York State to be competitive in the global market place," Senator Bruno said. Today's announcement is a culmination of our efforts to ensure that New York State will not only be a player in the global economy, but a predominant leader in charting the course for economic development in the 21st Century. The AMD announcement is great for Saratoga County, the Capital Region and all of Upstate New York. It will mean billions in economic investment and the creation of thousands of jobs so our children and grandchildren can enjoy the career of their choice right here in New York State."

I'd really be very curious to know why Advanced Micro Devices would want to settle in New York State, especially Joseph Bruno's part—well, I know why, but it's because of the subsidies Bruno offered. Though this idea isn't all-bad either. New York State invests a lot in education, and that does pay off. SUNY is brings billions of dollars to the state, and CUNY in the city has been doing well lately too. As Sheldon Silver was quoted as saying int he press release:

"My Assembly colleagues and I recognized the unique possibilities and potential economic benefits of this new-technology industry when we funded the first ever clean-room facility at the State University at Albany. That initial investment has created a dynamic, growing, synergy here that has attracted AMD to conclude New York is the place to be. Our state is making its mark on the world’s high-technology stage. Our talent, our universities, our workforce and our investments are creating the environment that this industry seeks. New York State’s high-tech future couldn’t be brighter."

Given the rigid economic structure of the state, one sometimes has to wonder why New York has any future at all in the land-intensive market of researching and manufacturing silicon wafers. On the other hand, though, New York has a long history of high-tech research. Afterall, Kodak and IBM are here, and have been for a long time. Technological advances in New York go back longer than that, and certainly can be traced at least to the day when Robert Fulton first tested his steamboat. Alexander Graham Bell, Nikola Tesla, George Westinghouse, and Thomas Edison all worked, did business, or researched in New York City.

Looking at New York through the prism of history, one sometimes has to wonder why Silicon Valley didn't end up being the Hudson Valley. A lot of the ingredients are there: great schools, room for growth, skilled and educated labor, and a massive well of businesses and industries that could have benefited directly from high-tech research.

Instead, the situation today involves skilled workers educated in the state leaving the state for other states. There are all kinds of reasons cited for this, but it can't all be described by weather. Colorado and New Hampshire are growing. Likewise, Ontario isn't the warmest place in the world either.

Improving the state's population growth might require a slew of serious reforms at all levels of government. The federal government should make it easier for the city and state to welcome what newcomers it does manage to attract, be they laborers working in kitchens or high-tech talent from India—there is no reason to lose this kind of talent to Ontario or to other states. Likewise, the state and city need to reform their tax structure. Albany needs to stop acting as a second municipal government for the city, and focus broadly on the needs of the state as a whole. Albany shouldn't concern itself with New York City's bus routes. New York City needs to figure out how it can best diversify its economy in the face of competition from other great world cities, as well as smaller cities in America that could easily attract New York City's artistic and creative population with cheaper real estate.

As a matter of fact, New York City seems to be promising some years of balanced growth, if the city's own estimates are to be believed (that's according to the Department of City Planning). This is a strange prospect for a big American city indeed. It will provide new tax revenues, while simultaneously eating them up with new challenges in the areas of education, public health, housing, and transportation. Sam Roberts reported this problem on February 19, 2006, in The New York Times ("Coming Soon, 9 Million Stories in the Crowded City"):

With higher birth rates among Hispanic and Asian New Yorkers, immigrants continuing to gravitate to New York City and a housing boom transforming all five boroughs, the city is struggling to cope with a phenomenon that few other cities in the Northeast or Midwest now face: a growing population. It is expected to pass nine million by 2020.

New York might need an extra million or so slices of cake for its 400th birthday party in 2025.

Estimated today at a record 8.2 million, the population is expected to reach nearly 9.4 million in 2025. But that projected growth poses potential problems that New York is just starting to grapple with: ensuring that there are enough places in which to live, work, attend school and play and that transportation and energy are adequate.

Elaborating on Mayor Michael R. Bloomberg's disclosure last month that city planners were drafting a strategy to cope with this expected growth, Daniel L. Doctoroff, the deputy mayor for economic development, said the city could accommodate a million additional people or more, but only if it began planning for their needs now.

''We have the capacity through rezoning and underutilized land to go well over that number,'' he said. ''But you cannot simply divorce the issue of growth from the infrastructure required to support it. It opens up great opportunities only if the growth is smart, if we have the things that make cities worth living in.''

...

Among the goals of the plan, Mr. Doctoroff said, are to produce greater geographic diversity -- more jobs in Downtown Brooklyn, Flushing and Jamaica in Queens, the South Bronx, Harlem and the Far West Side -- and to preserve manufacturing jobs.

Except for the clothing industry, manufacturing jobs have not decreased year to year for the first time since World War II.

City officials rarely engage in long-range planning, particularly for growth. A short-lived proposal for ''planned shrinkage'' was advanced in the mid-1970's, sandwiched between a comprehensive statement of urban challenges and potential solutions in 1969 and a candid but still largely optimistic assessment in 1987.

''This will be different,'' Mr. Doctoroff said. ''Much more practical.''

New York has been the most populous American city since the first census in 1790. Almost steadily since the 1940's, more people have been leaving the city for other parts of the country than have arrived here from other areas of the nation.

Growth in the 1980's and especially the 1990's has been largely driven by immigration. Foreigners are expected to account for much of the growth in the next two decades, growth that, according to the forecasts, would keep New York in first place among the nation's cities and maintain the New York metropolitan region either as the largest or, at least, tied with Los Angeles.

I've always taken a wait-and-see approach to state reformists. It's obvious that the state bureaucracy is too bloated, too rigid, and too draining on taxpayer money. That's been the case for a long time, and it's created a slew of problems. The challenge has always been to keep the state afloat, and allowing it to thrive is rarely discussed. Nevertheless, there are a few optimistic signs about Upstate New York. Take this one from Syracuse ("Projects under way reflect investors' confidence," The Syracuse Post-Standard, March 13, 2007; by David Mankiewicz):

The story in Sunday's Post-Standard, "CNY in for $2 Billion Building Boom," gives an excellent picture of growth and development in the city of Syracuse.

All of the projects referenced in the story are in, or near, downtown Syracuse. These are not speculative projects 20 percent are underway, and the remainder will be initiated within two years. This level of capital investment is a reflection of the growing confidence by developers and investors in Syracuse's urban core.

There are important implications of this new investment....

Needless to say, the implications involve improved energy use, a more vibrant downtown, better transportation options, population growth, job grown, and a more vibrant economy. The downsides noted were noted too:

Another story in Sunday's Post-Standard, "Local Warming," discussed the negative consequences of continuing our sprawl-dominated, fossil-fuel dependent lifestyle. The story reported on new efforts to affect change at a local level.

As a community, we have a once-in-a-lifetime opportunity to reverse the impact of suburban sprawl and create a thriving urban center. The Syracuse community should react positively to this growth and focus resources toward building new housing and transportation forms to support it.

David Mankiewicz is deputy director of the Downtown Committee and assistant to the Metropolitan Development Association president.

But what about Buffalo, Albany, and Rochester? All these are cities that have been slowly declining in prestige and economic vitality.