Toronto Drives Away Businesses

Two articles were published today in response to a survey about running a business in Toronto. The first was in the National Post (click here for the full article); the second on 680 News (click here for that article). Both were of the opinion that changes to legislation regarding businesses have been encouraging business owners to pick up their operations and leave Toronto.

Why are businesses leaving the city? The most basic answer is taxes – property taxes are on the rise pushing more businesses to seek for cheaper offices. Moving from a downtown Toronto location to Markham or Mississauga would lower the cost of property tax, but at the expense of what?

Toronto is a large center of commerce, and moving away for some businesses will cost them their clients. While business owners may save money on taxes, they may not be able to retain all their customers. However, most businesses will find that the change of location does not have a major impact. For those who do need a Toronto location, there are a variety of offices that are available on a per use basis, such as Telsec, which rents offices on a daily and monthly basis. While these offices do look shared, they can help maintain a presence in the downtown core without the cost.

Toronto needs to realize that to keep businesses in the city, they need to offer more than merely being a center of commerce. With the growth of technology and working remotely, the ties to particular locations are being constantly reduced. If the city continues to plague businesses with increase taxes, businesses will leave for cities that encourage them to grow there, and Toronto will end up losing their claim to being the largest center of commerce in the area.

As they said on Dragon’s Den last week, “don’t be greedy”.