The purpose of this paper is to describe the way in which policy decisions have been made by the government of Metropolitan Toronto during its first twelve years of operation, and to set policy-making in the broader context of interest-group and electoral politics in the Toronto area. I begin with some comments on the structure of Metro government and on the current debate over Metro’s successes and failures.

The Municipality of Metropolitan Toronto was a major breakthrough in the post-war drive for reorganization of local governments in metropolitan areas. As the inability of small, autonomous local governments to deal with metropolitan problems became apparent, most North American metropolitan areas began considering various devices for meeting region-wide needs. Metro Toronto, created in 1953 by an act of the Ontario legislature, is the oldest example of what has become known as the metropolitan federation plan, a device subsequently adopted for the Miami and Winnipeg metropolitan areas.

The 1953 provincial statute setting up Metro brought the City of Toronto and twelve suburbs under the umbrella of a new regional government, but did not alter any municipal boundaries in the area. A few powers were shifted to the Metro level, a few were left solely with the municipalities. A majority of powers, however, were to be shared by both levels of government. Metro was dominant in the fields of public transportation, property assessment, capital borrowing, highway construction, and the construction of water and sewer facilities; the municipalities were dominant in the fields of zoning, housing, welfare, police, fire, licensing, and traffic control. The only major change in this 1953 division of powers occurred in 1956, when policing and licensing functions were amalgamated–that is, shifted from the municipal to the Metro level.

Canadian federal experience has centred around two major themes. The first relates to cultural dualism, the desire and ability of French- and English-speaking Canadians to survive as such and to use the governmental institutions which they respectively dominate in order to ensure this outcome. The second involves public action to meet the material expectations of individuals and groups living within an economy where burdens and benefits have been determined largely by the economic policies of successive federal administrations. Those who have concerned themselves with Canadian federalism have usually believed, explicitly or implicitly, that either the cultural or the economic problem was the major challenge which the federal system faced. Thus there are two versions of what our constitutional arrangements are all about, and these are most strikingly illustrated by the divergent perspectives of the Rowell-Sirois and Tremblay Commission. The former was almost exclusively concerned with the reallocation of revenues, revenue sources, and functional responsibilities between the two levels of government and did not deal in any explicit way with the impact of existing or proposed arrangements on the survival of the two cultures. To the Tremblay Commission the great theme of our constitutional history since Confederation is the attempt of English-speaking Canada to subvert the original federal compact and the resistance of these attempts by French Canadians; its Report does deal in great detail with economic issues but its basic argument is that the essential and permanent value of Canadian federalism is to make possible the survival of the two cultural groups.

This paper presents some computations of the impact of exports to various areas of the world in 1956 upon output, employment, and income originating in Canadian industries. It also examines what might have happened if both exports and imports in 1956 had increased by, say, one hundred million dollars; that is, if a balanced increase in foreign trade had occurred. A major purpose of the analysis is to illustrate a method by which the effects of such an increase on the industrial distribution of output, employment, and income might be estimated. The analysis includes, in addition to the direct effects, the indirect effects on industries which produce materials or other inputs used by the industries directly affected by foreign trade. Inter-industry input-output analysis has been used to estimate these indirect effects. Secondary effects resulting from the changes in income induced by the changes in foreign trade are, however, not included in the analysis.

The year 1956 was chosen largely as a result of statistical convenience. As a result of previous work by the present authors, a large body of inter-industry statistics for 1956 exists. This made it possible to “update” the 1949 input-output matrices to 1956 by a technique which will be explained below so that it could be used in conjunction with the export figures specially prepared for this study.

The analysis of trends in industrial location is one tool with which regional economic development may be examined. Changes in the pattern of location are indicative of the continuing alteration of cost relationships within the profit-maximizing firm. From the broader standpoint, changes in the locational pattern of manufacturing activity may have a considerable impact on the distribution of population. Finally, industrial dispersion poses problems of resource management and allocation among agriculture, housing, industry, and conservation.

This study deals exclusively with the location of manufacturing industry. Its main purpose is to identify various trends towards dispersion or concentration of manufacturing among the cities and counties of the province of Ontario. In Section II input and output measures within the context of the production function are briefly discussed. Following the earlier work of Slater, manufacturing employment is adopted as an input measure. Value added is selected as an output measure with which to assign appropriate weights to individual manufacturing units so that they may be summed to an aggregate measure of activity. Descriptive analyses of changes in the locational pattern as revealed by percentage shares and Lorenz curves are reported in Section III. In preference to either of these, however, the coefficient of variation is stressed as a method to describe the distribution of manufacturing industry. Yearly estimates of the coefficient of variation for value added and employment distributions are developed in Section IV. Time trends are fitted to these annual estimates, and the meaning of the trends discussed. The results of the study are summarized in Section V.

In the past several years, a Royal Commission has reported on the automotive industry and a number of changes have been made in tariffs on automobiles and parts. Although the changes of late 1962 and late 1963 differed in detail from the recommendations of Dean Bladen in his Royal Commission report, they introduced in an alternative form the major innovation recommended by the report, namely, export incentives. By encouraging exports, and particularly exports of parts, the government hoped to stimulate Canadian employment, improve the current account balance, and contribute to the efficiency of the Canadian industry by making possible longer production runs.

Issues of great complexity were introduced by both the Bladen recommendations and the recent changes. Evaluation of their probable effects is made doubly difficult because of the previously existing system of import duties compounded with Canadian content requirements. Nevertheless, it is important that a detailed study be made of recent innovations, particularly as the three-year limit on the changes of late 1963 has made it clear that there will be a major review of policy in the near future. American objections to the innovations, and the possibility of retaliation, have further increased the importance of an evaluation.

This study has two main purposes: the estimation of certain demand relations, and the assessment of the usefulness of Canadian consumer expenditure surveys as a source for the derivation of such estimates. Results from five surveys of Canadian urban family expenditures in the post-war period have been published, and the returns from a sixth are now being processed. These reports have received relatively little attention from economists, probably because of the limited scope of most of the surveys. Their principal objective was to provide appropriate commodity weights (or a check on existing weights) for the Consumer Price Index (CPI); the sample interviewed was mostly restricted to the CPI target income group and often to only a few cities. The surveys for 1947–48 and 1959, however, do not contain any family-size or income restrictions. The former sampled the non-farm population and the latter those living in cities with populations of 15,000 and over. For these two surveys, expenditures on major commodity groups were cross-classified by income and family-size. It is only for these two surveys that Engel curves can be fitted. Estimates of income and family-size parameters were obtained for this study by using two methods of estimation—least squares and instrumental variables. The results obtained from the latter method provide, under certain assumptions, a measure of the extent of the downward bias in the least squares estimates of the parameters caused by transitory income. In addition, estimates of the income elasticity of consumption are obtained on the basis of different methods of grouping the spending units surveyed, in an attempt to test the hypothesis that this value is unity.

It appears to be generally agreed that there ought to be a close integration of economic theory and the building of econometric models, together with the auxiliary activities of data collection and processing. If this is to be so, then every econometric model must be a special purpose model or at best a model designed for a limited range of related uses. A model is, by definition, an image of reality that is simplified according to certain criteria of what is important and what is not. Its construction necessarily reflects the main preoccupations of its builders, the relations and measures they think relevant to the problems they face, and even their particular versions of economic theory. This leaves the door wide open for differences in emphasis, in priorities, and even in fundamental interpretations of economic phenomena. In short, a model appropriate for, say, Quebec, will necessarily differ considerably from models constructed for the federal government or its agencies and from models set up by large corporations for their own use. And it is not just a matter of fitting different parameters into the same logical structure; the logical structures themselves will differ.

Secondly, if true integration of model building with economic theory is to be attained, and if a solid observational basis is to be secured, we must work very close to the micro-economic level. This means that models must be disaggregated, since our most solid theoretical results are in micro-economics.

In spite of the relatively small share of agriculture in the economies of the industrialized nations, national agricultural policies continue to provide a major source of domestic and international friction. A special interest attaches to Britain's policies towards agriculture because of her great dependence upon imported food. Since the diversity of British farm output makes generalization hazardous, attention will here be focused upon one major commodity only, wheat.

This paper enquires as to the effectiveness of protection for the domestic wheat grower and of tariff preference for the Commonwealth exporter, as indicated by the shares of the home and overseas suppliers in the domestic market from 1925 to 1960. An estimate of the level of protection is introduced into the discussion largely with the idea of throwing some light upon the achievements, as distinct from the intentions, of the policy-makers for the years subsequent to the return of the wheat trade to private hands, i.e., after 1953.

Before commenting upon the efficacy of protection, some explanation ought to be offered as to why it was introduced when it was. It might be more illuminating, however, to ask the question in another way: viz., why was protection not maintained after the First World War?

Canadian anticipations data for manufacturers' capital and repair expenditures are now extensive enough to allow statistical estimates of their accuracy to be made. The data are based on mail questionnaire surveys conducted and analysed by the Dominion Bureau of Statistics and the Department of Trade and Commerce. Their year-end “cut-off” surveys include manufacturing establishments having gross sales in excess of $200,000.00 annually, and are used to estimate intentions for the year ahead, as well as to provide actual expenditures for the current year and the previous year. The results are published the following spring, and the forecasts are revised at mid-year on the basis of smaller “follow-up” surveys which include only the larger establishments.

The accuracy of these forecasts is measured in this study by comparing them with the estimates of actual expenditures which are published two years later. Objections to such comparisons on the grounds that the forecasts could be used as an instrument of control, designed to influence the subject of the forecast, can be safely ignored, since the published results are simply summations of the estimates of individual establishments, with a mechanical allowance for non-surveyed expenditures. Our measure of accuracy might also be criticized on the grounds that the estimates of actual expenditures may be as inaccurate as the forecasts themselves, so that the comparison of forecast to “actual” is no measure of the accuracy of the former. This is unlikely to be the case, however, since the accounting data of most firms provide accurate and readily available statements of actual capital outlays.

This paper is a preliminary report of a study of post-war patterns of aggregate consumption in Canada. The data consist of the eight gross categories of personal consumption recorded in the official statistics, and the corresponding price indicators. A fifteen-yeai time-series spanning the years 1949 to 1963 has been used to fit a complete system of consumer demand equations for the eight categories using a method more fully reported elsewhere. Basically, this method makes the simplest plausible assumption about the form of the utility function, namely, that of “directly additive preferences,” and utilizes the consequent dependence between substitution and income effects to sharpen the specification of the model. In the absence of such specifying restrictions, analysis of short time series is not likely to prove very fruitful.

It is not claimed that “directly additive preferences” provides the optimum set of restrictions (though it certainly provides the simplest). More sophisticated utility schemes, such as Mr. Barten's “almost-additive” preference concept, are likely to yield more reliable results. In this sense, the present report is preliminary. There are also other areas even within the framework of additive preferences in which further improvements could be sought; some of these are indicated later. Finally, the available arbitrary classification of consumption expenditure is in no sense ideal.