While Toronto is well-positioned to maintain its standing as the third largest financial services centre in North America, a survey by the Toronto Financial Services Alliance identified regulation as a crucial factor in need of development in order to attract and retain financial services operations.

The results of the 2003 Competitiveness Study, released today, show that Toronto remains a desirable financial services hub due to the availability of good managerial and professional talent, its solid information technology and telecommunications infrastructures and also as a result of the city’s geographical proximity to customers.

Nearly 200,000 Torontonians are employed in the financial services sector, with 21,000 new positions created within the sector in the past two years. Stronger growth was noted in the outlying 905 area code regions as opposed to the downtown core. During the same two-year period, New York’s financial sector lost 25,000 jobs, while employment in Chicago, Philadelphia and Boston was stagnant.

Though Toronto’s employment statistics are encouraging, the survey found a higher-than-expected degree of mobility in financial community. Seventy per cent of the 87 executives surveyed noted that they had investigated or made the decision to relocate, expand or downsize their Toronto operations in the past three years.

The expense of doing business in Toronto was a major drawback identified in the survey. Cost factors — such as income tax rates, commercial real estate costs and access to housing — received weak survey scores.

Regulation was another competitive disadvantage highlighted by survey respondents. While the regulatory environment was rated one of the most important location factors, Toronto received only an average score in the category. However, due to the design of the survey, no specific reasons for this weakness were identified. It’s an area the TFSA intends to explore in the future.

The TFSA will be discussing the results of the Competitiveness Study with all three levels of government. Regulatory reform will be a hot topic. A TFSA committee is currently reviewing the ramifications of national securities regulation for Toronto.