- Inequality of income and economic opportunity is getting worse.
- Business should serve all stakeholders – customers, employees, communities, as well as shareholders.
- Corporations, governments and community groups can work together to tackle these issues.
The post code of the home where you were raised is a stronger predictor of your economic opportunity than your skills and ability. This barrier to success, or fairness gap, begins here for many in the communities we serve.
Addressing this disparity of opportunity and income has traditionally fallen on governments and not-for-profit agencies. Indeed, it is a major preoccupation of one of the largest United Way chapters in the world, United Way Greater Toronto.
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Business should serve all stakeholders – customers, employees, communities, as well as shareholders. So we at BMO believe it must also play a role in addressing these disparities. The most effective solutions to bridge these opportunity gaps can be found at the local level – and require all stakeholders to come to the table and work together.
While the Greater Toronto Area is Canada’s largest economic region, its neighbourhoods have become a series of islands starkly segregated by income. The prospect of new development and public infrastructure in any community brings great economic opportunity, but for many residents it also brings fear of economic displacement – a legitimate concern based on history.
One year ago, BMO announced a $10 million investment in a new initiative with United Way Greater Toronto to find ways to make economic growth inclusive for all residents, and reduce the worsening of income disparity in communities.
Over the past year, BMO and United Way Greater Toronto have convened a group of local business leaders (among them, Aecon Group, Blackrock, IBM, McKinsey, PwC, Sun Life Financial and University of Toronto), to form a public-private partnership focused on developing inclusive local economic opportunities in a specific Greater Toronto Area neighbourhood.
Our objective is to find ways to address issues at the heart of income disparity between neighbourhoods by developing sustainable and scalable tactics and frameworks that corporations, governments and community groups can use to tackle these issues together.
How do we ensure that local residents benefit from the redevelopment and revitalization of their community? How do we ensure a virtuous cycle of development, employment opportunities, and community wealth building that revitalization promises? It is part of a broader need to keep the economy growing while facilitating greater economic inclusion.
Working with United Way, who are informed by their network of agencies and partners, with years of experience and local insights, our roundtable of business leaders began by identifying the range of potential levers available to them.
We were specifically looking for opportunities within our areas of control, and specifically not drawing up a to-do list for various levels of government. Next, we worked with United Way, the City of Toronto, to identify a neighbourhood to pilot our initiative.
We took the important step of engaging local community leaders to work with us to shape the initiative. By working with a diverse group of leaders who approach these challenges from different perspectives, we were driven to move quickly for the benefit of the community and buoyed by a sense of optimism of what we can achieve together.
The first concrete steps have already been taken. The neighbourhood we’re working in is at the centre of a major public transit infrastructure project that will dramatically reshape the economic prospects of the community.
To generate local jobs and create wealth, Aecon is spearheading a community-owned joint venture to meet supply chain needs for the construction and maintenance contracts resulting, in part, from that transit project.
We’re also developing a “small business catalyzer”, together with RioCan Real Estate Investment Trust, that will serve to accelerate emerging local businesses by providing them with low-rent or rent-free spaces in the properties currently under development.
By working closely with community leaders, we will continue to identify new ways to ensure that the community benefits from change – and, in turn, we are confident this will generate a scalable model for approaching redevelopment projects in other neighbourhoods across the Greater Toronto Area and beyond.
Already, we’re seeing that the model can be applied elsewhere. Working with United Way partners and the Mayor of Chicago, BMO recently committed an additional $10 million to build inclusive local economic opportunities in the western and southern neighbourhoods of Chicago, with a similar approach.
Through our actions, we can help level the playing field for all and start to address the inequality of income across communities. Creating inclusive local economic opportunities in the communities where we do business is one more way we can achieve these goals. And working with like-minded business and community leaders, we can achieve those goals together.