Canada’s future prosperity depends on the success of its major cities, according to a report released today by The Conference Board of Canada.

“For Canada to achieve sustainable prosperity in a world of fundamental and relentless change, we must ensure that our cities can realize their potential,” said Anne Golden, president and CEO of the Conference Board, in a news release. “Ignoring cities’ needs and treating them all the same won’t get us there.”

Eighty per cent of Canadians live in urban areas, and more than half live in ten major cities. These major cities-where two-thirds of Canada’s new jobs were created in the last decade-have neither the power nor the resources to compete globally against other city-regions for investment and human talent. The municipal governments of Canada’s major cities are caught in fiscal pincers: while bearing costs of services offloaded by federal and provincial governments, their share of overall government revenues in Canada is insufficient. Municipal governments obtain less than 12 per cent of the revenue pie and this share is declining. To succeed, cities need access to taxes that increase with economic growth.

Canada’s major cities are also in need of new ways of governing. Present systems of municipal governance fail to provide cities with the organizational structures and decision-making capacity necessary for strategic planning and regional coordination.

The Conference Board said “the new City of Toronto Act passed in 2006 represents a milestone for municipal governance and an example of how provincial governments can help major cities without relying on a one-size-fits-all approach.”

Strategic investment in Canada’s major city-regions is further justified by the Conference Board’s research on hub cities, which found that when major cities prosper, their success boosts economic performance in other communities within their province or region. Federal and provincial governments must end their largely per capita approach to funding, instead allocating investments based on both distinctive needs and potential. Within Canada’s major cities, Toronto, Vancouver and Montreal stand out for their sizable contributions to the national economy and equally sizable investment needs.

Four cornerstones create a foundation for successful cities: a strong knowledge economy; connective physical infrastructure linking people, goods and ideas; ecologically sustainable and efficient industrial systems; and socially cohesive communities. Adequate fiscal resources and strong political leadership at the local level are indispensable conditions for success.

Mission Possible: Successful Canadian Cities is Volume III of a four-volume set entitled Mission Possible: Sustainable Prosperity for Canada. It is the final report of The Canada Project, a three-year program of research and facilitated dialogue that seeks to help improve our standard of living and position in North America and the world.