Hub Cities Drive Economies?

Major cities across Canada and in many other countries suffer from decaying infrastructure and a lack of funds. While provincial or state governments as well as federal governments have strong taxation powers to extract money from citizens (income tax, sales tax, etc.), cities typically are more limited. Property taxes and occasionally some sort of tax on gasoline sold in the city often comprise the only fundraising measures available besides asking for handouts from other levels of government.

However, if the national economy depends upon the economic health of major cities, then it would be wise for federal and regional governments to support cities.

This is precisely what the Conference Board of Canada (an independent economic and policy research organization) argues in their recently released a study entitled "Canada's Hub Cities: A Driving Force in the Economy."

They state that economic growth in smaller communities across the country strongly correlates to solid growth in the hub city. The Conference Board identified nine such hub cities in Canada. If you want to support all communities, they argue focusing policy efforts and boosting support for the 9 hub cities.

In their study they examined whether Canada's three largest cities (Toronto, Montreal, Vancouver) played super-hub roles nationally, and they do not. Increasing support for Toronto apparently will not help people in Moose Jaw.

This study provides further evidence of the new city-state dynamic emerging.