Tuesday, June 28, 2005

Barber's urban bias

Readers might be swept away by John Barber's torrent of exuberance over Professor Thomas Courchene's ideas on funding cities.

Globe and Mail - Saturday June 25 2005

However, those who manage to remain on dry ground should question Courchene's basic assumption. Are 'city-regions' really the 'prime centers of growth in new knowledge-based economy', or should we instead be crediting the companies and institutions that often happen to exist in those regions?

A key measure of success in the knowledge-based economy is the number of patents issued. The number of patents issued to universities especially portends of the long-term health of the 'KBE'. Per Courchene's hypothesis, urban areas should predominate in the standings of university patents issued. However, in 2003, five out of the top ten US universities in terms of the number of patents received are in small cities and towns. These are the Universities of Texas, Wisconsin, Michigan and Florida, and Cornell University in Ithaca, New York. The total number of patents granted to these five institutions alone far exceeds that granted to all Canadian universities.

We should be concerned more about our universities than about our cities. Canadian cities score well in quality-of-life measures - and most major urban areas are seeing strong growth. Most Canadian cities are in good financial shape. With one notable exception, our cities seem to be able to handle the always challenging task of balancing their budgets.

Only Toronto appears incapable. Despite strong growth in property values, booming residential construction, large social services transfers from neighbouring municipalities, extra-high business tax rates, regular bailouts from the Province, and now the lion's share of the Ontario gasoline tax - the situation seems to worsen.

Instead of trying to devise different ways of allocating tax dollars, Courchene would serve us better by coming up with a plan to restructure Toronto's costs.

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