NFI Industries

The Benefits of Including Toronto in Your Supply Chain

Toronto may be known for the Maple Leafs, but it also has the largest population of Canadian residents and a growing business environment. Toronto’s economy is growing and is expected to continue at an average rate of 1.4% per year until 20351.

So what makes this area that sits above Lake Ontario so attractive to so many businesses looking for a distribution center in Canada? For starters it’s known as Canada’s financial and business capital with over 40% of Canadian company’s headquarters located in the area2. It’s the fourth largest city in North America and its ranked second for the Best North American City for business investment3. Toronto’s Economic Development Committee has voiced its commitment to continue to make Toronto a transportation hub. Because Toronto’s economy continues to grow, other companies have begun to deliberately establish locations in the area.

Location, Location, Location

The greater Toronto area is considered the largest distribution hub in Canada and one of the largest in North America. Toronto offers a unique location with its proximity to the United States and to the Canadian population. The Greater Toronto Area has access to over 135 million people within a 500 mile radius – nearly double the 70 million people within 500 miles of New York City. Companies can cost -effectively ship cross-border from Toronto and in a single day deliver product to major cities including New York, Chicago, and Washington D.C.

Available Transportation Outlets

Like any great transportation hub, Toronto has a great infrastructure for trucking, a rail network, and the added flexibility of two international airports. Its proximity to Port Montreal gives it access to the imported ocean containers that can be shipped via rail. The Pearson International Airport is the main airport in Ontario for passengers and cargo. As Toronto continues to evolve they are adding additional options and flexibility within Hamilton Airport, another nearby international airport that is also starting to handle cargo freight.

Labor

Toronto has a huge labor pool, with 40% of all of Canadian jobs located in the area4. With the largest population in Canada, at about 2.8 million people, there are plenty of potential employees available. It is home to a highly educated, skilled, and multilingual population5.

Infrastructure

In recent years Toronto has been making huge infrastructure improvements with state of the art construction and design. As of January 2015 there were over 135 high-rise buildings under construction6. Since 2014 over 19 million square feet of commercial real estate has been constructed7. Larger public warehouses are being built that allow multiple companies to share space and labor and benefit from the cost efficiencies that come with larger scale. These warehouses also feature more dock doors and larger yards for trailer storage to increase flexibility and accommodate shipping volume surges. These improvements will further optimize supply chains and increase productivity.

Financial Incentives

In the past year the Canadian dollar has weakened which encouraged many American companies to source from Canada or set up business in the area. The operating costs in Toronto are less than other popular cities in the United States including Philadelphia, Detroit, Los Angeles, and New York8. Toronto has been called the world’s most tax-competitive major city9 because it has reduced its tax rates for commercial and industrial properties to continue to grow the business environment.

Toronto will continue to grow as companies benefit from their business focused environment and centralized location. The area presents endless opportunities to expand and prosper.