Trusted Business CentreAccountability, stability, and fairness—the city scores in the top 10
Why in the midst of the Financial Crisis was Toronto’s business community able to close $4.2 billion worth (2009) of real estate deals? Trust. When a deal closes in Toronto there is absolute faith that the financing and regulation is in place to guarantee the transaction. Toronto’s businesses are adept at providing accountability, stability and fairness that form the bases for trust and valuable market conditions. Trust is necessary in this complex economic environment, with shifting priorities and rapidly evolving technologies.
Toronto’s businesses are renowned for their accountability practices and transparency. The specialized financial and business service cluster, a sector subject to moral hazard and asymmetric information, takes pride in its ability to adhere to ethical standards. In the World Bank’s Global Competitiveness Report for 2010, Canada ranked in the top 10 for strength of auditing, ethical behavior and the efficacy of its corporate boards (for a summary of Canada’s results click here).
As of 2011, all publically accountable businesses in Toronto will use the International Financial Reporting Standards (IFRS). IFRS is widely used around the world as a single set of high quality, understandable and enforceable global accounting standards. IFRS will replace the Generally Accepted Accounting Principles (GAAP). Adoption of IFRS will further enhance the accountability and ethical culture that exists in Toronto, solidifying its position as a trusted business destination.
Since the early 1990’s, Canada’s well structured financial system has provided a level of stability that has been advantageous to the overall business environment in the City of Toronto and the Greater Toronto Area (GTA). Consistent and stable results strengthen the demonstrated accountability of businesses, signaling the likelihood of future growth and strengthened trust.
Over the last 20 years, Canada’s economy has consistently grown at a rate between 1% and 6%, except for the recent economic downturn. During that time, inflation has remained in the 1% to 3% target range as set by the Bank of Canada. Nobel laureate in economics, Paul Krugman, wrote in a New York Times article earlier this year that the world stands to learn from the remarkable stability of Canada’s banks. In Canada, effective regulation combined with a risk averse long-term approach to business development, resulted in not a single bank failing. In February 2009, U.S. President Barack Obama praised the Canadian banking system saying: “In the midst of the enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system and the economy in ways that we haven’t always been.” Toronto’s economy has a growing reputation for consistency and stability. As a result, Canada ranked in the top 10 of the Edelman Trust Barometer in 2010 and the 2009 Transparency International: Corruption Perception Index.
Engaging in economic exchanges, parties need to be reassured that attempts have been made to address their vulnerabilities and provide fair opportunity for mutually beneficial results. When companies from 153 countries around the world come to do businesses in Toronto they know the transaction will be conducted in accordance with the rules of the World Trade Organization. In addition Canada has a free trade agreement with nine countries including the United States and Mexico. These agreements give foreign companies the opportunity to sell their goods and services in Toronto to a market of over 400 million people.
Toronto stands out as the multicultural city of the 21st century. Nearly 6 million Torontonians, half of which are foreign born, work, play and live together in one of the safest and friendliest cities in North America. The City’s Economic Plan outlines a commitment to fairness by emphasizing the importance of economic prosperity for all Torontonians. Through social programs, public education, universal healthcare, community programs and a strong ethos of corporate social responsibility, residents and businesses live and work in a vibrant economic environment.