Urban Policy: A Time for a Paradigm Shift

This policy paper examines current attempts to increase urban densification in Canada’s metropolitan areas, and makes a common-sense but unorthodox argument that cities would be better off embracing urban dispersion.

Executive Summary

This report reviews the dominant strains of urban land-use and transport policy (urban containment) in metropolitan areas and evaluates its longer-term impact on households and the economy.1

1. Urban policy: the context

Large cities are a relatively recent phenomenon in the world, having proliferated only over the last 200 years. Generally, cities have grown because of the economic opportunities that they have provided for residents. That being the case, the purpose of cities is to facilitate greater affluence. This is best measured by maximizing household discretionary incomes (the income left over after taxes and basic necessities). All things being equal, higher household incomes lead to lower levels of poverty.

In recent years, Canada’s economy has performed very well, especially in relation to competitors such as the United States, Western Europe and Japan. Canada is virtually alone among major high-income nations, despite some setbacks, in being close to balancing its national budget.

Yet, there are concerns, particularly at the metropolitan area level. House prices have been rising strongly relative to incomes, and there is some concern that a housing bubble may be developing. At the same time, traffic congestion and travel times in metropolitan areas in Canada are greater than those of many world competitors with high income. This detracts from competitive position of cities.

Cities are important to the economy. The 2011 census indicated that more than 80 per cent of the population lives in metropolitan areas and that between 2006 and 2011, 95 per cent of the population growth in the nation occurred in metropolitan areas. The major metropolitan areas (over 1,000,000 population, including Toronto, Montréal, Vancouver, Ottawa-Gatineau, Calgary and Edmonton) accounted for 65 per cent of the population growth, considerably more than their 45 per cent population share.

A number of metropolitan areas are now subject to urban containment policies that were adopted to stop the expansion of urban areas (pejoratively called “urban sprawl”). The focus of urban planning is principally on the nature of the urban form and the method of urban transport. Urban form and transport, however, are not objectives in themselves. For example, the objective of personal travel is not personal travel; rather, it is reaching a destination. The objective of urban form is not pleasing architecture, street patterns or visual landscapes, it is to enhance and improve the lives of urban residents.

Public policy should be focused on objectives. In urban policy, this means greater household affluence and poverty eradication in the context of sufficient environmental protection and prudent fiscal stewardship.

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