City

Reasons to Love Toronto: No. 1, because boom times are back

Reasons to Love Toronto: No. 1, because boom times are back

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Toronto is the rare city experiencing a construction frenzy (185 high-rises, to New York’s 80), a hiring spree (in the last quarter of 2011, while Bank of America and Citigroup fired almost 10,000 staff, our eight biggest banks added 2,800), and a surge in swaggering confidence. As our reputation for stability spreads, the world has begun to look at us differently. Many of the units in those 185 towers are owned by wealthy foreigners who see Toronto as a smart investment.

We owe this prosperity to Paul Martin. That’s one theory, anyway. Back in 1998, before we’d ever heard of sub-prime loans or credit default swaps or Volcker rules, Martin, then federal finance minister, stomped an imperious foot on CIBC’s plan to merge with TD and RBC’s with BMO. The banks’ chairmen were furious that a year’s worth of negotiations was all for naught. How were they expected to grow their already enormous businesses if they couldn’t merge? In hindsight, they should be grateful: kept to their size, they weren’t big enough to enter full-tilt into the delirious American market and, come 2008, end up like Merrill Lynch and Citigroup (forced to swallow billions in bad loans) or Bear Stearns and Lehman Brothers (RIP).

Martin’s edict paid off, especially for Toronto. Our banks—ranked top in the world for reliability, four years running—are finally on their coveted expansion spree, but instead of competing at the sub-prime racket, they’re buying up struggling American banks. TD has been the most aggressive, absorbing Banknorth for $6.7 billion, Commerce Bancorp for $8.33 billion, auto lender Chrysler Financial for $6.3 billion and South Financial Group for $191.6 million. It now has more branches in the U.S. than it does in Canada. A Canadian tourist in New York City, where the bank is the fifth-largest (with plans to soon become third), could be forgiven for experiencing a smug rush of manifest destiny.

Topics: Bank of America banks Best of the City BMO Business CIBC Citigroup Condos construction economy Features finance high-rise New York Paul Martin Reasons to Love Toronto 2012 Royal Bank TD Bank Toronto tower

6 thoughts on “Reasons to Love Toronto: No. 1, because boom times are back”

  1. Oh, yeah. I’m loving all this sudden densification of office towers and condos all in and around the Union Station area when City Council and developers care only about plopping big buildings with tens of thousands of people each without any plan to reroute traffic, ease congestion, increase public transit. No one can even get the two existing Harbourfront street cars in increase in capacity, particularly during rush hours. And the Queens Quay E line is still MIA. For someone who has been living in this area for a long time for its somewhat quietness and “away from it all” feeling, this is precisely why I love Toronto so freakin’ much.

  2. Leading the pack pleading for bank mergers was BMO’s Matthew Barret. Rejected as noted, he resigned for the CEO’s position at Barclay’s Bank in London which of course he proceeded to destroy and was a major receiver of UK government bailout.

    Mr. Martin genuinely deserves accolades for inadvertently deporting that Matthew Barret: a true robber baron.

  3. I don’t see how this is a good thing. Foreign investors seem like they would arbitrarily drive up the local real estate market, making it harder for local residents, many of which might still be working in sectors that are still recovering from the recession and making money that’s no par with real estate prices.

  5. really? the housing bubble is a good thing?! does anyone screen these articles before they are published?

  6. Toronto is great, but why the constant comparison to New York City? Toronto will never be on the level of a New York, London, Paris or Tokyo. I’m not saying that’s a bad thing, it’s just reality. Toronto is more like a Chicago or San Francisco. Just a nice, big North American city, not an alpha world class city.

    There are not many new developments in Manhattan because it’s already kind of full. Plus our latest buildings aren’t just small condos, but huge architectural feats like New York by Gehry, One57 and the Freedom Tower.

    Also, who cares if there are TD Banks in New York? 90% of stores in Canada are American and Americans could care less. I’m certainly not smug when I come to Canada and see McDonalds everywhere.

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