Alain Miguelez, author and currently senior planner with the City of Ottawa



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Study of Canada’s hub cities
blinkered by regional politics

By Alain Miguelez*

3 August 2006: The Conference Board of Canada study released earlier this month ‘Canada's Hub Cities’ is an interesting exercise designed to say that the country's hub cities should get extra help to support their economies and build up their infrastructure. A worthy message, for sure.

Unfortunately, the Conference Board falls victim to Canadian politics, something startling for an organization of its stature. A big part of the study's shortcoming is its puzzling reliance on provincial boundaries to identify nine hub cities. The Conference Board tests whether the rest of a province's economy is converging toward the GDP growth rate of its ‘hub city’.

The trouble is that, given the size disparity of provincial and regional economies across Canada, the list of the nine hub cities includes hubs of completely different magnitudes and ignores the hierarchy of urban centres, which has nothing to do with provincial boundaries. Notably, the list manages to discard Ottawa-Gatineau, the nation's fourth-largest metropolitan centre and a G-8 capital city.

Let's take a look at what the Conference Board says. The cities that qualify as hubs in its study have a leading share of their province's GDP. The three undisputed hubs in this respect are Winnipeg, Vancouver and Montréal (65 per cent, 53.2 per cent and 49 per cent respectively). Then, the Conference Board combines pairs of cities: Calgary and Edmonton, despite being three hours apart, are somehow joined as one ‘hub’ that commands 64.8 per cent of Alberta's GDP. And Regina and Saskatoon are joined to account for 44.7 per cent of Saskatchewan's GDP. Just so the east doesn't feel left out, Halifax is added as a hub city because it takes 46.3 per cent of Nova Scotia's GDP. The Conference Board actually elevates Halifax as a super-regional hub for all four Atlantic provinces, but does this without calculating Halifax's GDP as a share of the Atlantic Region's GDP (obviously, its share would be much smaller).

What follows is a list of calculations that attempt to demonstrate how each region's economy is trying to catch up to their hub's economy, with actual results showing that this convergence, in the Conference Board's own words, is "minimal at best."

What we have here is mathematics obscuring logic. The absence of Ottawa-Gatineau from this list of hubs actually helps to understand how flawed the Conference Board's analysis really is. It also confuses the important issue of what really constitutes an urban hub. It's an important matter to address, however, because funding decisions at the highest level could be based on this type of flawed logic. By the way, this is the type of confusion that led the former Martin government to water down its New Deal for Cities into a New Deal for Canadian Communities. Good Canadians always compromise.

Calling Montreal, Vancouver and Winnipeg provincial hubs is obvious. The first two cities also happen to be ranked two and three in population; they dominate their province because no other city approaches their size, and in the case of Montreal, its metropolitan reach goes well beyond Quebec – in fact, it used to be Canada's economic hub. In Winnipeg's case, it is the only city of any size between Ontario and Alberta.

Calling Toronto the hub of Ontario is disingenuous. Toronto is Canada's metropolitan hub. Toronto actually captures the smallest share of its province's GDP of all other listed hubs. In other words, when you're that big, you dominate an economic space that goes well beyond your provincial boundaries. And since Toronto happens to be in Canada's biggest province, the extent of its influence on the provincial economy is smaller compared to hub cities in smaller provinces with fewer cities.

Calgary and Edmonton have been rivals for years and Calgary has pulled ahead decisively in the past decade. Trouble is, pesky Edmonton is still there and its population is pretty much the same as Calgary's. Politically, it's impossible to call one a hub and not the other. One is the provincial capital, the other is the economic capital. So the Conference Board conveniently groups them and, surprise surprise, the two cities capture two-thirds of their provincial GDP. The analysis neglects to consider that both Alberta cities, and especially Calgary, act as hubs for the entire Prairie region. Saskatoon, Regina and Winnipeg lose people to Calgary and Edmonton every year. But once again, politics dictates that you can't say that officially. So, Regina and Saskatoon both qualify as hubs.

As for Halifax being the hub for the entire Atlantic region, it's safe to say that Moncton would beg to differ, but Moncton is not big enough yet to be a Census Metropolitan Area. Interesting again, because Moncton truly is a hub for New Brunswick, PEI and western Nova Scotia.

So where's Ottawa in all of this? In terms of numbers, it's impossible to dominate a ‘provincial’ economy so thoroughly dominated by Toronto – the Conference Board's excuse to exclude us from the list. This again is disingenuous. Using the Conference Board's own numbers, it's easy enough to see that the real GDP for Ottawa-Gatineau is larger than the combined GDPs of Winnipeg, Regina and Saskatoon. It is about the same size as Edmonton's and not far from Calgary's. In other words, the amount of real economic activity taking place in Ottawa ranks well within the top tier of Canadian cities.

Because the Conference Board's analysis only compares a city's GDP to that of its province, we end up with a list of cities whose economic dominance ranges from national to purely local.

One has to wonder if there isn't some sort of conspiracy to shut Ottawa out of the metropolitan map of Canada. This is only partly tongue-in-cheek, given that our city's name is a four-letter word outside our boundaries and we have so few ‘friends’ out there in Canada, as a city. Regardless, when a reputable institution like the Conference Board wades into the issue with such flawed logic and loaded implications, we have to speak up. No map of metropolitan Canada can exist without Ottawa-Gatineau on it. Plain and simple.

The Conference Board is a trusted analytical think-tank that can step back and tell an unbiased economic story to guide national policy. This time, it has lowered itself to the game of regional politics and Canada is poorer for it.

*Alain Miguelez is an urban planner and market analyst with 12 years' experience in the private and public sectors. From 1999 to 2002 he served as senior market analyst for Ottawa for the Canada Mortgage and Housing Corp. Presently he is senior planner, with responsibility for research and forecasting, with the City of Ottawa's planning and growth management department. His article was originally published in the Ottawa Business Journal.


The modern wing of Ottawa's City Hall on Laurier Avenue; the 19th century wing is on Elgin Street


Canada’s hub cities
By the Conference Board of Canada
Canada should strategically focus municipal investments in its hub cities instead of spreading funds across the country on a per-capita basis, says the Conference Board of Canada.

“Supporting hub cities creates a win-win for all communities and regions across Canada,” said Mario Lefebvre, Director, Metropolitan Outlook Service. “When the economically leading city in a province prospers, so does the rest of the province as a whole. Economic growth in a provincial or regional hub has a ‘coat-tail effect’ driving an even faster rate of growth in small communities within that province.”

The study, Canada’s Hub Cities: A Driving Force of the National Economy, identifies eight economically-leading large cities that function as ‘hub cities’ for their province—Vancouver, Calgary and Edmonton, Regina and Saskatoon, Winnipeg, Toronto and Montreal—and a ninth city, Halifax, that functions as a hub city for the Atlantic provinces.

By tracing real gross domestic product (GDP) per capita for each hub city and for other communities within a province or region between 1987 and 2004, the Conference Board’s research found that smaller communities are closing the economic gap with, or converging to, their hub cities in every case. This means that when the economies of hub cities prosper, other cities and towns do so too, growing at an even faster pace than the hub cities themselves.

The research also found that convergence does not operate strongly among communities in different provinces (a major reason being limited labour mobility, an important inter-provincial trade barrier). This means that focusing investments in just a few hub cities will not be enough to boost economic growth nation-wide. A wider program of hub city investment would be more effective in achieving that aim.

“We are not saying that the nine hub cities, representing 46 per cent of Canada’s population, would monopolize funding to municipalities,” said Lefebvre. “We are saying they would receive a share of funding that corresponds to their individual needs. For example, public infrastructure deficits are often concentrated in the larger cities. Funds should be strategically focused to help big cities thrive, because doing so will produce benefits for all Canadians.”