The economic recession that put America on its knees hardly touched Toronto. Steadied by strong, highly regulated banks and buoyed by an educated workforce, Canada's largest city is open for business.
"TSX is the third-largest stock exchange on the continent. It's rock solid," says Katherine Roos, manager of Enterprise Toronto, a public-private alliance run by the city to support entrepreneurs and small businesses. "The Canadian banks didn't go under, they didn't need to be bailed out."
In addition, the multicultural city is clean, safe, and full of parkland. The main disadvantage might actually be that the city doesn't tend to shout about its strengths, particularly as an incubator for a wide range of businesses.
For entrepreneurs contemplating a move to the great north, Torontonians offer these insights:
Step 1: Identify the Basic Incentives
"The strength of Toronto is that we have such a diversified economy," says Eva Pyatt, director of business services for the city's economic development and culture division. That strong economy is a natural draw for entrepreneurs.
Ontario has a low net debt-to-GDP ratio, which helps keep taxes down. Early in 2010, the international professional auditing firm KPMG, based in the Netherlands, assessed 41 large cities worldwide on their general tax competitiveness, including corporate income taxes and statutory labor costs. It ranked Toronto fifth, above New York, Los Angeles, and London.
There are many local business incentives available, Roos says. They include resource conservation and energy efficiency incentives offered through the city's Better Buildings Partnership and funding for early stage businesses from the province. An Ontario Centre of Excellence in Toronto also provides funding for rapid-growth entrepreneurs.
Roos cites Susan Ho as an example of an entrepreneur who received substantial startup support. With help from an Ontario self-employment training program and the city-funded food business incubator, she started a company in Toronto that makes tea-infused cookies. Now, more than 200 retailers are selling her Tea Aura Inc. cookies.
Step 2: Register Your Business
Toronto is one of the easiest places in the world to start a business. In Canada, it's a one-step procedure versus six in both the United Kingdom and the United States, according to the World Bank. New businesses can simply register through Enterprise Toronto.
Roos says she frequently gets calls from extremely well educated entrepreneurs who live overseas about setting up a business in the city. "They couldn't believe that they could just walk into our offices and walk out at the end of the day with paperwork showing they'd registered their business," she says.
Step 3: Check on License Requirements
Licensing for business is separate from registration, but is only required for businesses that fall into certain categories. The city's Municipal Licensing and Standards Division handles the application process, which is straightforward. Photo identification and proof of work status are required, and so is a copy of the registration along with notarized controlling interest forms, if they apply.
Roos says licensing applies to businesses, particularly those with health implications that the city regulates. The list includes hairdressers, pet shops, grocery stores, holistic centers, secondhand shops, nightclubs and restaurants among others. Applications have to be completed in person.
Step 4: Find The Best Business Supporters
Start-up strength in Toronto doesn't just stay back home. Toronto might not have its own Silicon Valley, but it has the C100, a group of Canadians working in Silicon Valley who are using their expertise to support entrepreneurs back home. The nonprofit organization's membership includes CEOs at startups as well as Oracle, eBay, Microsoft, and Google execs.
"Toronto is a pretty unique city in the sense that it's one of the most socially connected in the world," says Sarah Prevette, one of Inc.'s 30 Under 30 and the founder of the entrepreneur social networking service Sprouter. "Certainly there is a lot of support for business owners at a grassroots level."
Support includes local stewards who volunteer their time to help as well as formal assistance from accelerators and business incubators. The Toronto Fashion Incubator, Toronto Food Business Incubator, Toronto Business Development Centre, and the Centre for Social Innovation are some of the top incubators, Roos says.
Step 5: Scope out Hiring
Finding qualified workers for a new venture isn't a problem, Roos says. Torontonians are highly educated — 64 percent of people aged 25 to 64 have a post-secondary degree. The city's population is also intensely diverse. Half of the 5.1 million people in the greater metropolitan area were born elsewhere.
Idris Mootee, CEO of the Toronto-based strategic innovation consulting firm Idea Couture Inc., has lived in major cities around the world. His company has offices in San Francisco, Shanghai, and Washington, D.C. While the workforces in New York and San Francisco can be like a rollercoaster, he says, Toronto is different.
"The No. 1 thing is it's a good talent base here when you're looking at engineers, consultants," he says. "Most of the people here are starting families. It's generally a good place to raise kids with the healthcare system." And that means great workforce stability, he adds.
Prospective business owners should be warned that they will need to pay into the Canadian equivalent of Social Security, Canada Pension. But Pyatt points out that providing healthcare benefits will cost far less than it does in America due to the country's universal healthcare system.
Step 6: Secure Financing
Toronto is the headquarters for the country's banking sector, and those national banks are highly regulated. There are fewer banks here than there are in The United States, but they offer financial services with which Americans are familiar. Most of Canada's banks also have locations abroad, and 44 bank subsidiaries have locations in Toronto.
"Banking is very safe, secure, and highly accessible," Pyatt says. "We're a leader in electronic banking and electronic accessibility from the get-go."
Looking for investment? That might be a bit trickier. Venture capitalists in Canada are known for being conservative, so entrepreneurs might encounter some risk-aversion. However, thoughtful strategic investing helps keep the local economy solid. When Canadian VCs do act, Roos says, "they make good decisions."
Step 7: Choose a Neighborhood
Toronto regularly tops most livable cities lists, in part because it has a large percentage of parkland. Mootee says that it's been easy for his company to hire employees from overseas and get them set up in town. "It's like a cleaner, greener version of New York," he says.
The immigrant population is so large that the city has several Chinatowns and Little Italys, in addition to dozens of ethnic neighborhoods. "Torontonians have international business experience, international connections," Roos says.
In addition to districts known for fashion and technology, the city has 70 business improvement areas, where local businesses are working with City Hall to draw residents to their goods and services. And at the day's end, the downtown core stays hopping because residents can easily live close to where they work.
Step 8: Find Office Space
Real estate vacancy rates for real estate are between 6 and 7 percent, Pyatt says. While funkier post-and-beam spaces do exist and industrial buildings are being converted to offices, Toronto has more than 100 new high-rise buildings under construction.
Being such an environmentally conscious city, those new millions of square feet in office space are primarily LEED-certified, meaning they have the Leadership in Energy and Environmental Design green building designation.
For businesses that are building a new facility or planning to retrofit a space, Pyatt says there are tax increment equivalent investment grants for some sectors if spending hits $1 million (Canadian dollars). Eligible development receives a grant for up to 60 percent of the increase in applicable municipal taxes over a 10-year period.
Step 9: Tap Into Transit
The expansive Toronto Transit Commission's system of subways and rapid transit routes carries one million people daily. One of the cleanest in the world, the system received a $1.5 billion (Canadian) investment in for five new light rail routes, Pyatt says.
The Toronto Pearson International Airport is the country's largest, as well as the busiest. It also recently introduced free Wi-Fi. Toronto is only a one-hour flight or less from about half the U.S. population, Roos says. Being so close to the U.S. border, Toronto's highway access makes it ideal for companies specializing in exporting and manufacturing that need just-in-time deliveries.
Step 10: Make the Move
Americans relocating to Toronto will likely feel at home, culturally. "The only main cultural difference I can find is that Canadians tend to be a little bit more demure and a little less aggressive," Prevette says. No surprise then that Toronto has been far too modest about its strengths.
"We're just a well-kept secret," Pyatt observes. Not for long, eh?