Finance, Insurance and Real Estate Firms and the Nature of Agglomeration Advantage across Canada and within Metropolitan Toronto

Article excerpt


This study compares the spatial patterns of finance, insurance and real estate firm concentration at inter-urban (for urban areas across Canada) and intra-urban (for the Toronto census metropolitan area) scales and attempts to ascertain to what extent agglomeration economies advantages are contributing to the spatial arrangement of these firms. Urban areas that specialize in finance firm activity, while rare in Canada, will typically possess a high proportion of university degree holders, a wide variety of business establishments, a comparatively balanced population age structure, a low unemployment rate and a large proportion of people employed in higher order service occupations. Real estate firm specialization is most likely to occur in growing and wealthy urban areas that are also diverse in terms of establishment type and population age structure. There are many urban areas in Canada that feature insurance firm specialization but overall this FIRE sub-sector is poorly predicted by agglomeration economies criteria. The highest densities of FIRE firm activity in metropolitan Toronto are found in the City of Toronto's south-central 'downtown' district. Based on a survey of large FIRE firms, it is demonstrated that this central location remains important because of various agglomeration advantages such as the ability to benefit from face-to-face contacts.

Keywords: finance, insurance, real estate, Canadian FIRE firms, urban specialization, agglomeration economies


Cette etude compare la distribution et la concentration spatiales des societes de finance, d'assurance et immobiliere a l'echelle interurbain (pour les zones urbaines a travers le Canada) et intra-urbain (pour la region metropolitaine de recensement de Toronto). L'article vise a determiner dans quelle mesure les avantages d'economies d'agglomeration contribuent a la concentration spatiale de ces compagnies. Les zones urbaines qui se specialisent dans l'activite financiere, bien qu'elles soient rares au Canada, possedent typiquement une haute proportion de detenteurs de diplome universitaire, une large variete d'etablissements d'affaires specialises, une population comparativement equilibree sur le plan de la structure d'age, un bas taux de chomage et une grande proportion des gens qui sont employes dans des occupations de service specialises. La specialisation des compagnies immobilieres se produit, plus souvent qu'autrement, au sein de zone urbaines privilegies et en pleine croissance marques par la diversite de type d'etablissement et sa population (structure d'age). Il y a plusieurs zones urbaines au Canada ou se concentre les societes d'assurance, mais en general ce sous-secteur est difficile a identifier selon les criteres d'economies d'agglomeration. La densite la plus elevee d'activite des societes de finance, d'assurance, et immobilieres se retrouve dans la region metropolitaine de recensement de Toronto, plus precisement dans le secteur sud-central du centre ville de Toronto. Notre enquete de ces grandes societes demontre que le centre-ville demeure un facteur de localisation important a cause des avantages d'agglomeration divers, tel la capacite de profiter des contacts face-a-face.

Mots cles: Societes canadiennes de finances, d'assurances et immobilieres, economies d'agglomeration


Finance, insurance and real estate (FIRE) activities have far-reaching influence on individuals and businesses through a multitude of transactions carried out by banks, trust companies, credit unions, investment firms, insurance companies, real estate firms and other related institutions. In addition, Canadian FIRE companies are significant contributors to the nation's gross domestic product, provide substantial government tax revenues, are important employers (in terms of both professional/quaternary occupations and tertiary jobs) and generate local spin-off activity.

With reference to the 2002 North American Industry Classification Structure (NAICS), Canada's FIRE sector can be more precisely defined as follows. …