At one time a beneficiary of tariffs which encouraged the formation of an import substitution manufacturing zone in southern Ontario, Toronto's subsequent rise to world city status has been based on the city's disproportionate national share of business and commercial services. Growing out of the intensive manufacturing of the Fordist era, the city's globally oriented service sector is the legacy of a now defunct Keynesian interventionism that sought to promote national economic development through a comprehensive industrial policy. This chapter explores the recent transformation of Toronto to the status of a world city by examining these sectoral shifts and the long-standing and pivotal role of finance capital in the national economy. The emergence of a new economic space of predominantly finance-based accumulation has coincided with the cultural transformation of the city through increased international and internal migration, and has provoked conflict over the direction of local economic development.

David Gordon (1988) reminds us that the historical process of the integration of the world economy is far from complete. But as many observers have noted, there has been a considerable expansion of the global circulation and investment of capital and of the movement of migrant populations (Sassen 1988, 1991; Stafford 1992). These phenomena can be connected to the period of almost continuous economic crisis that began in the 1970s and which spurred foreign direct investment (FDI) and saw the rise of competing industrial capitals in the newly industrialized countries (NICs).