If a home in Toronto or Vancouver is too expensive, why doesn't Canada just build a brand-new city from scratch? It sounds like the perfect solution for young people priced out of the housing market, but history shows that trying to centrally plan a metropolis from the ground up usually ends in spectacular failure.
In this episode of Classonomics, Sabrina Maddeaux and Mike Moffatt break down whether creating brand-new cities can actually solve Canada’s housing affordability crisis, how our metropolitan numbers compare globally, the failed history of planned-city experiments like Ontario's Townsend and Australia's Monarto, and why central planning can't replace the organic economic realities that make cities thrive.
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Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Mike Moffatt: If you write about the housing crisis like Sabrina and I do, you’ll often get comments like this one.
Sabrina Maddeaux: Not everybody can live in Toronto, so Canada should create more cities to give young people new places they can afford.
Mike Moffatt: Sometimes it’s from someone who already got their home, but sometimes a version of it even comes from people looking to buy a home for the very first time.
Sabrina Maddeaux: If a home in Toronto and Vancouver is too expensive, why does it feel like the only other choice is to move somewhere without jobs or to spend enormous amounts of our lives commuting? Today on Classonomics, we’ll talk about why it seems impossible for Canada to create a new city, and whether we’d even really want to if we could.
Creating new cities is a nice idea in theory. Toronto wasn’t always this giant metropolitan area. If we did it before, we could do it again. In theory, the people who are trying to get into the housing market at this point could get in early in this new city where homes would presumably be much cheaper. They could invest early, set down their roots, grow families, and not have to deal with the challenges that come with density—buying in an older city with infrastructure that wasn’t originally built with so many people in mind. And let’s be honest, Canada has a lot of space. A lot of it isn’t easy to develop, but there’s no reason why we couldn’t see London, Peterborough, or Kingston become big cities similar to Toronto or Vancouver.
Mike Moffatt: To be clear, everybody should move to London. But when we look at this practically, in my mind it comes down to two questions. First, what do we mean by a city? It turns out that’s not pedantic—that really matters. Secondly, what is the mechanism that people have in mind when they say we should create new cities? Because in a very real sense, we are creating new cities, and Canada always has.
If we go back 25 years to 2001, since then, the City of Toronto’s population has grown by less than 30%, and the City of Montreal by less than 20%. But at the same time, Milton’s population has grown fivefold. It’s gone from 30,000 people to 150,000 people. Brampton has more than doubled in size - it’s added half a million people. Vaughan, Surrey, and Markham have nearly doubled. Kitchener is twice as big as it was in the mid-1990s. Even places like Chestermere, Alberta, which used to have 4,000 people, are soon going to have 40,000. So we are seeing new cities getting created, but they’re doing so in an organic way rather than a planned way.
Sabrina Maddeaux: Right. I really don’t think that’s what people have in mind when they talk about Canada needing more cities. I think what they’re actually picturing is having more metro areas like the GTA. Most of the places you just mentioned, while technically cities, are really just Toronto expanding outward.
Mike Moffatt: Exactly. I do think that is what people have in mind when they say Canada needs more cities.
What they really mean is that we need more big metros, not that the GTA needs to have more satellite cities around it. But even there, our big metros are often growing slower than some of our smaller ones.
Now, it certainly feels like the GTA has rapidly grown over the last couple of decades. But if you go back to 2001, it’s actually only the 14th fastest-growing metro out of 41. Vancouver is only 12th, and Montreal is all the way down to 34th out of 41. So if you look at our fastest-growing metros, Calgary and Edmonton are one and two.
You might think, okay, those count as big metros. But if you look at the next four after that, it’s Kelowna, Red Deer, Chilliwack, and Saskatoon. These aren’t big cities; they are not places with NHL teams, or CFL teams for that matter - though I do think the Roughriders claim the entire province of Saskatchewan, not just Regina. But the point remains that these are not places that would be considered big metros, yet they are growing faster than Toronto, Vancouver, and Montreal.
Sabrina Maddeaux: Yeah, that’s really interesting that our existing big metros are falling behind smaller ones on growth, which very much has to do, I would think, with the cost of living - especially housing in these cities. And then you add to that decreased benefits like high unemployment and stagnant wage growth in what are supposed to be the country’s economic centers. So essentially, if you’re choosing to live in these places, you’re getting all of the cons of city life without a lot of the historical pros.
That said, even with all this growth among smaller metros, it still feels like we don’t have that many metros for a country of our size.
Mike Moffatt: It certainly feels that way, but it turns out we’re right where we should be. Canada has six metros that have a million people or more, which are our six metros with NHL teams. We do have a seventh NHL team in Winnipeg, and my apologies to Winnipeg: you don’t make the cut here; you’re not in the million-person club.
We could say six metros doesn’t feel like a lot, but Canada only has 40 million people. So we have a limit on how many million-person metros we can have. If we compare ourselves to countries at a similar stage of economic development or population, we’re right where we should be.
Italy and Spain only have five metros with a million people, France has seven, South Korea has eight, and the UK has ten. These are all countries that have larger populations than Canada, but are still in the same ballpark. So it simply isn’t true that Canada has an unusually small number of metros. We’re right where we should be, or even arguably have more than you would expect, given the fact that we are only 40 million people.
Sabrina Maddeaux: Right. All those places are geographically smaller than Canada, though you’d think with our massive size we’d spread out more and have more metros, or that’s what a lot of people say, anyway.
Mike Moffatt: Yeah, and I do think it’s one of the reasons why we have six and not, say, five or four.
It’s hard to compare Canada to a lot of other countries, because there are not that many other countries that have both our size and our population. Canada’s population density is less than five people per square kilometre, and there are only four countries in the world that have more than 10 million people and a population density of under ten, let alone under five.
Two of those countries, Australia and Kazakhstan, have fewer metros than Canada. So we look at those and say we’re not behind them by any stretch of the imagination. If we expanded our criteria to look at every country with a population density under 20, we add five additional countries to our list, and four of them have fewer metros than Canada. The remaining exception is Saudi Arabia, which has seven, to our six. So geographically speaking, big countries with small populations generally don’t have that many metros, and Canada really isn’t an exception.
Sabrina Maddeaux: Part of the problem, though, is obviously that while we’re geographically large, a lot of that square footage is inhospitable and has climates most people don’t want to live in. There are already enough complaints about weather in “southern” Canadian cities like Toronto or, worse, Ottawa. So I’m curious, what other country is the exception to this rule you mentioned?
Mike Moffatt: Well, I’m sure everyone’s guessed by now, but the one exception here is Russia. Russia has 17 metros of over a million people, which is three and a half times as many as Canada. But Russia’s population is also about three and a half times as large as Canada. So it’s scaled that way, though when the Soviet Union broke up, Russia’s population was over five times that of Canada, so we’re growing quite a bit faster than they are.
But we have to make clear that Russia didn’t exactly get that many metros organically. There was the forced migration of roughly 6 million people during Stalin’s reign, as well as more voluntary migration as the Soviets created new centers of manufacturing across the country that were not so close to Europe. So it should go without saying that I don’t think Canada should be trying to emulate Russia.
And I particularly say that to you because Vladimir Putin banned you from visiting Russia, and I have to say, that’s a badge of honour I’m still jealous of! Because of that, and because we want to keep you around, I will say Canada should not emulate Russia.
Sabrina Maddeaux: Definitely not. The solution is by no means rounding up young people and forcing them to migrate to rural areas or northern areas in hopes that cities will magically sprout up around them.
Mike Moffatt: Yeah. When people ask why Canada doesn’t simply create more cities, I often wonder what exactly they’re picturing, because I’m quite certain they don’t mean Stalinist relocations of working people. So I’d love to get more details on what exactly they have in mind.
Sabrina Maddeaux: Yeah, there have got to be other options besides that, though.
Mike Moffatt: There certainly are, and the history of them is not great. The success story of creating new cities that people typically point to is in the United Kingdom. These were initiatives done between the end of World War II and the late 1960s, called New Towns, and there was a whole new towns movement around them.
These were built under some fairly unique circumstances, and the most successful new towns were ones fairly proximate to existing big cities like London. So it’s really not that much different than how Milton is growing so quickly. These new towns were built a little bit more planned and a little bit less organically, but a lot of these new towns were still in the orbit of big cities - they weren’t necessarily creating new metros. Those are your success stories.
But if we look at the research, back in 2002, the UK government studied the effectiveness of these new towns, and they came to the following conclusion:
“The new towns are no longer new, and many of the quickly built houses have reached the end of their design life. The master plans dictated low-density development, with large amounts of open space and housing segregated from jobs, shopping and business services. These created a car dependency and are now not considered sustainable.”
Those are the same basic criticisms that urbanists make about suburban communities in the 905 around Toronto. So I fail to see the distinction here between what was done in the UK and what Canada has done organically, again with the subtle difference that the UK did it in more of a planned way and we did it in more of an organic way, but we got to the same place.
Sabrina Maddeaux: Has Canada ever tried creating new towns like that?
Mike Moffatt: Yeah, we have. Not all of our initiatives were organic in nature. The most famous example is Don Mills, which is now part of the City of Toronto. It was built as a planned new town in the early 1950s. But again, that’s not creating a metro—it’s creating a suburb of Toronto, part of the GTA.
Now, there are cases of countries or provinces trying to create entire new metros, not just new suburban towns. My favourite example is in the late 1960s, when the province of Ontario developed a plan to create a new manufacturing metro on Lake Erie, just south of Brantford. They called it Townsend, and Townsend was meant to have a population of a quarter of a million people—basically becoming a metro the size of Kelowna or some of the ones we mentioned earlier.
The core idea behind it was that Townsend would attract all of these manufacturing plants, which would attract workers and develop a new metro to take pressure off Toronto. But as it turns out, it didn’t go anywhere because it didn’t make sense for manufacturers to locate there. Townsend wasn’t near supply chains, nor was it near amenities like Highway 401 or Highway 403.
Australia is also famous for such schemes, and most of those ended up in failure as well. Similar to Townsend, the Australians were trying to create a new city called Monarto that was supposed to take population pressure off Adelaide. It was about 80 km away, and they wanted to build a metro that would reach about 200,000 people by the year 2000. Today, it has a population of 203. Not 203,000, but 203 people total.
Sabrina Maddeaux: Minor difference.
Mike Moffatt: Just a little bit of a difference! That’s a failure by any definition. No matter how much slack you’re willing to give government, being off by 100,000% is not good.
My favourite thing is that all this land set aside to be an industrial park and homes is now a zoo - a safari reserve, which I hear is quite nice - but what they basically did was create a place for zebras to live, not people.
If we look at Australia or other places, the only real success stories are places like Canberra, where Australia created a whole city to house their government. So unless the province of Ontario is going to move Queen’s Park to Wawa or something, these plans always end up being a massive waste of tax dollars that end in failure.
Sabrina Maddeaux: All of these initiatives you mentioned are “big government” approaches where the government is trying to get people to move to a specific location of their choosing in a highly centrally planned way. Isn’t there any free-market version of this where, instead of government doing more, it does less through lower taxes or regulations in underpopulated parts of the country?
Mike Moffatt: It’s a fair question, because a lot of this really does show the failures of central planning. Can we achieve the same outcomes through a free-market approach? Obviously, taxes and regulations matter on the margin, and they determine why a tech firm might choose to locate in Silicon Valley or Austin, Texas, or why a manufacturer might locate in South Carolina versus Ohio.
But all of the incentives and deregulation are not going to get a tech firm to move to West Virginia. Like the manufacturers with Townsend, companies need access to supply chains, talent, and infrastructure, which are only located in a handful of places. So it doesn’t make sense for companies to move there, and changing regulations and taxes doesn’t really change that. Frankly, if companies are so mobile that they can do business anywhere on the planet, why would they move to northern Ontario when they could move to Bangladesh or Mexico or somewhere where wages are far below what they would ever be in Canada or the United States?
At the individual level, people already have a massive incentive to move to places like northern Ontario, where housing is five times cheaper than in the GTA. But people, for the most part, aren’t making that move. How much more incentive can there be for people to make that move? It’s a bit of a chicken-and-egg problem: workers need to move somewhere that has work, and companies are going to locate somewhere that has workers. So these schemes don’t really work either.
And it always leads me to ask: if we could reduce these regulatory barriers with no side effects, why wouldn’t we just do that everywhere? If we have a regulation that doesn’t make sense in the GTA, why would we only abolish it for northern Ontario instead of getting rid of it entirely?
Sabrina Maddeaux: To be honest, even if we could create a new city and tell job seekers and priced-out families to move there, the idea strikes me as unfair because it divides the country into haves and have-nots.
It creates a situation where only the haves are able to live in whatever city they want, whereas the have-nots are forced into isolated parts of the country, not of their choosing.
But fairness aside, would that even be practical?
Mike Moffatt: You’re right. It’s not only unfair, but it’s also really not practical. The idea that young people can all move to one city while older homeowners remain in existing cities simply doesn’t work. You can’t have all the rich older people living in the City of Toronto, and all the personal support workers and nurses living in Thunder Bay or southeast Saskatchewan. A society simply can’t function that way.
There needs to be room in every single community for people of various wealth and income levels, or else you’re not going to have the workers you need in the healthcare system, the education system, and so on. Every community has to have a diversity of age and income levels. This idea of shipping all the young people off to more remote parts of the country fails to understand why people live where they do and why businesses locate in one place or another.
Cities are not simply warehouses for humans that can be placed anywhere. Proximity to amenities, supply chains, and infrastructure all matter. You can’t build cars and have auto workers in Churchill, Manitoba, any more than you can move the oil sands to Mississauga.
A lot of these businesses are in specific locations for specific reasons, and you can’t wave that away by government diktat. People are going to locate where it makes sense for them.
Sabrina Maddeaux: For sure. Beyond economic reasons, people choose to live in existing cities because of culture, access to the arts, and all these other things that would take a very long time to build up somewhere else - if they ever could be. So there’s that entire aspect of it as well.
Thank you so much, everyone, for watching and listening, and thanks to our producers, Meredith Martin and Cara Stern, and our editor, Sean Foreman.
Mike Moffatt: And if you have any thoughts or questions about why everybody should move to London, Ontario, please send us an email at [email protected].
Sabrina Maddeaux: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
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