Supporting Cities to Thrive: A Toolkit for Economic Development

Many governments face the same challenge of how to close the gap between economically successful metropolises and smaller towns and cities in the same jurisdiction that are struggling. These regional economic disparities are now a major part of the political dynamic in Westminster under the ‘Levelling Up’ agenda, but they are also present in many peer group countries, including Canada.

Today, Public First’s report titled Supporting Cities to Thrive: A Toolkit for Economic Development was published as part of the University Toronto’s Ontario 360 project. The paper builds off our work this year to develop an economic development strategy for the City of Windsor, Ontario, helping them navigate and overcome the effects of technological dislocation and offshoring over recent decades and supporting them to diversify their local economy.

In this paper, we apply a framework – called the “regeneration toolkit” – to four additional cities in Ontario struggling with low investment and high unemployment in the wake of de-industrialisation. Viewing these cities through the lens of the regeneration toolkit allows us to identify their strengths and weaknesses relative to proven drivers of investment and job growth – and, crucially, equips policymakers with the tools to develop customised, evidence-based economic development strategies.

The five cities chosen were Oshawa, Peterborough, Sudbury and Thunder Bay along with Windsor. These five were selected because they share similar long-run challenges, have broadly similar models of municipal governance, and are eligible for the same types of provincial and federal support, whilst also representing a range of different geographies and economic profiles.

The key takeaways from this analysis are relevant to policymakers in Ontario, in Ottawa, and also in the UK, and they are:

  • Any city, irrespective of size or location, can benefit from policies tied to clear economic growth strategies, however there is no single model. Each city must develop and adopt its own plan. The policy or civic initiative that works for Sudbury would not necessarily work for Oshawa, and what is more urgently needed in Peterborough might be less of a near-term priority for Windsor.
  • Municipalities will necessarily need local mayoral and council leadership with the vision and appetite to embrace a new strategy. Every municipality will require its own bespoke support and the strategies that are developed may need external scrutiny and validation. This will require political consensus around a certain degree of risk.
  • Although necessary, this local political consensus alone is insufficient, because smaller cities may simply lack the resources to conceive a coherent strategy alongside their pressing daily administrative duties, or have the bandwidth to develop the plan needed to implement it by themselves. Some provincial (or national) funding support in such cases would be warranted.
  • In order to successfully diversify their economies and adapt to new market realities, cities need strategies that leverage the contribution that higher levels of government can make. Unlike many US cities, Canadian municipalities simply lack the financial autonomy or legal powers to do this on their own, even if there is political consensus locally. To successfully devise and pursue a bespoke economic development strategy, cities like Peterborough, Sudbury and Oshawa need partners, both locally, and externally, to support them.
  • Top-down strategies are not effective unless they are developed collaboratively, and where the willing municipality is exploiting a local asset or historic strength for the city, for example, Windsor’s emphasis on automobility as a development of its historic auto-industry manufacturing strength, nurtured over a century.
  • There are relevant policy agendas for the future development of regional cities that are outside the remit of even the provincial governments. The most important of these is Ottawa’s federal remit around immigration, which is Canada-wide (except Quebec). All the cities in this study are already impacted by Canada’s high rates of immigration but there will be opportunities for them to benefit more from inward migration of talented newcomers if the incentives can be aligned so that policies encourage migrants to settle in the communities outside Toronto.
  • The policy agenda that is more squarely in the remit of municipal government is a city’s business attraction focus. In the context of new working patterns post-pandemic, the ability of a city to diversify by supporting local start-ups and enticing entrepreneurs to relocate will be important. Increased mobility is a new opportunity for smaller cities to win investment and attract internal migration.
  • Fundamentally, the success or otherwise of city revitalisation efforts is dependent on all types of people – community leaders, businesses, local residents, visitors – changing their behaviour and choosing an area to move to and invest in. So, strategies need to be built around policies that are likely to effect behaviour change.

All of these policy takeaways are also relevant to many English towns and cities, even if the municipal governance and economic context is different.

Public First continues to work on projects across the world to support cities in their policy development and in understanding the needs of local businesses and residents.