Canada’s Urban Competitiveness Agenda: Completing the Transition from a Resource to a Knowledge Economy

Produced by the Martin Prosperity Institute at the Rotman School of Management, University of Toronto.As this report shows, Canada is in effect a nation built around two different economic models — one based on resources, the other on ideas. These two economic models are centred in different regions of the country and shaped by different geographies. There are two basic ways firms, and by extension nations, compete. The first is by turning out standard products at lower cost. This is essentially how resource based economies work. The second is by offering something new, different, and better that creates higher value. This is how knowledge economies work. It does not have to be this way. Canada is one of the very few nations in the world that has the capacity to combine these two models, using resources to fuel the growth of the knowledge economy, while deepening and expanding the resource economy with technology and knowledge. The key to Canada’s overall future lies in this kind of synergy. It can no longer fall victim to the narrative that resources are the key to its economic future. Rather, it must use the proceeds that come from its resource rich economy to invest in the durable assets of talent, technology, and tolerance, fueling long-running economic growth and development while adding talent and technology to create a higher-performing resource economy. This report provides a data-driven examination of the key pillars of Canada’s current and future economic competitiveness. It identifies how the nation’s city-regions stack up in terms of its two growth models and evaluates their relative economic performance. We begin by outlining how Canada’s 147 city-regions stack up on the 3Ts of economic development. To do so, we introduce several new indexes of the competitiveness of Canada’s city-regions: the Canadian Talent Index, the Canadian Technology Index, and the Canadian Tolerance Index. After that, we introduce an overall composite measure of competitiveness in the knowledge and creative economy: the Canadian Creativity Index. We then turn to our comparative assessment of the economic performance of Canada’s knowledge- and resource-based economic models. We summarize our key findings and discuss their implications for the future competitiveness of Canada and its city-regions in the concluding section. The technical appendix provides the details on our data, indexes, and overall methodology