No, Rob Ford’s Crack Smoking is not Hurting Toronto Businesses

If you happened to pick up the Toronto Metro paper on Thursday morning, you might have noticed an article claiming that “experts” said that the scandal is bad for businesses in Toronto. It’s been echoed by other news outlets as well, including the CBC.

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This is the kind of assertion that’s easy to make, but rarely seems to be backed by any hard numbers. While its true that Toronto Region Board of Trade would like Rob Ford to step aside, its not uncommon for businesses to be overly sensitive to potential threats. But while we may not enjoy the additional and unflattering media coverage regardless of how funny it might be, it’s hard to see how Rob Ford’s personal life can overpower an entire city.

Because of the circus that is Rob Ford attracts so much attention, many feel like he can do permanent damage  to the reputation of the city. But cities are much bigger than their mayors, and few cities have ever been held back by the sordid private lives of their politicians. If you don’t believe me, simply compare the fates of Detroit to Washington D.C. and guess what was more damaging, the collapse of the auto industry, or Marion Barry’s own drug related escapades?

In the end the only lasting damage that a mayor or city council can do to us will be in the form of poor infrastructure and runaway costs. In other words the damage Rob Ford was doing before we learned about his crack use.

The Real Economic Impact of Rob Ford

Whether you think that Mayor Ford is great at his job, some terrible buffoon or actually a buffoon that is great at his job, there’s no doubt that we are all paying attention to his antics. But while Rob Ford’s behaviour may be giving Toronto a “black eye” internationally the reality is that it probably isn’t going to make much of a difference when it comes to Toronto’s economy.

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Rob Ford – Toronto’s besieged mayor

The real economic impact of Rob Ford will likely have nothing to do with his drug use, but more to do with his continued fight for cars against LRTs and bicycles. Mayor Ford is a car enthusiast, and he isn’t alone. In many of Toronto’s sprawling suburbs cars are king and public transit is largely relegated to buses. But the real complaint that car drivers have is in their commute.

Toronto is said to have the worst commute times of 19 major cities in a study completed in 2010. On average a round trip commute in the GTA is 80 minutes long, 24 minutes longer than drivers in LA and 32 minutes longer than drivers in Barcelona. This gridlock comes with a cost. In 2006 that cost was estimated to be about $3.3 billion, a result of travel delays, stress on vehicles, increased likelihood of traffic collisions and impact on the environment. Additionally there was also a loss to GDP from travel delays, which amounted to an additional $2.7 billion.

Since 2006 these numbers only seem to increase. In 2011 Toronto’s Board of Trade said that gridlock was now the greatest threat to economic prosperity in the region and estimated that the cost of all the gridlock was $6 billion annually and growing. That cost was updated again this year by the C.D. Howe Institute, now estimated to be about $11 billion.

In the midst of this are politicians fighting over whether we should have subways or LRTs. This is all proving to be bad both for our financial health, but also just plain bad economics. Subways, it is argued are a great investment, though they come with a high price tag. But if a subway line operates at less than full capacity it also serves to suck money out of public coffers. Maintenance for subways are also high, and while subways move many more people around you need people to make them profitable. But the other bad economic idea is the love affair with the car. Cars receive enormous public subsidies, in the form of dedicated roadways, highways, public parking spaces and mandated parking spots in new buildings. While this cost seems largely invisible it is still there, hitting our pocket book.

All of this amounts to an economic failure for Rob Ford. An inability to rally the city to one transit vision, his or anyone else’s, means that Toronto is stuck in gridlock and that is a real embarrassment.

Great Further Reading: Straphanger: Saving our Cities and Ourselves from the Automobile by Taras Grescoe