Intro: The Billion-Hour Tax on Toronto’s Innovation Ecosystem
As a paperboy in Washington, DC, Bob Rae delivered newspapers to then-Vice President Richard Nixon — a connection he later used to secure a brief meeting with the former US President. Rae, Ontario’s 21st and somewhat accidental Premier (1990–1995), recently made a comment in The Premier Files: Bob Rae | The Premier Files — that his government started the Eglinton subway line only to have the tunnels filled in by the subsequent administration.
In 1995, Toronto did something almost unthinkable in the history of urban planning: it spent millions of dollars to fill in a subway tunnel that was already being built.
Bob Rae, Ontario’s 21st Premier and the only New Democrat to hold the office, reflects on this “lost” Eglinton line — a project his government launched only to have the subsequent Harris administration literally bury the progress.
If the Eglinton subway had opened 30 years ago, Toronto wouldn’t just have a better commute; it would have a different economy. By analyzing the agglomeration effects, talent retention, and socio-economic democratization that a mid-1990s Eglinton line would have triggered, we can see the “lost subway” for what it truly is: a massive, invisible tax on the region’s innovation ecosystem. Could a single transit line have prevented the current housing crisis and accelerated the Toronto-Waterloo tech corridor by a decade?
1. The Acceleration of Agglomeration Effects
Innovation ecosystems rely heavily on “agglomeration economics” — the benefits that come when firms and workers are located near one another.
- The Theory: A completed Eglinton subway in the mid-1990s would have drastically shrunk the “effective distance” across the city.
- The Impact: It would have linked the airport (Pearson) to midtown and Scarborough decades earlier. This could have created a “corridor of connectivity” allowing global investors and talent to move seamlessly between international flights and the city core.
- The Ecosystem Result: We likely would have seen a faster maturation of the “Toronto-Waterloo Corridor” concept. If moving within Toronto was frictionless 30 years ago, the friction of moving between regional hubs (like Kitchener-Waterloo) would have become the primary problem to solve earlier, potentially accelerating regional rail projects (GO expansion) that are only happening now.
2. Talent Retention and the “Livability” Cap
Arguably, the biggest threat to Toronto’s current innovation ecosystem is the cost of living, specifically housing.
- The Mechanism: Tech workers, particularly early-career talent and founders, are priced out of the downtown core.
- The Counterfactual: Had rapid transit existed across Eglinton 30 years ago, it would have unlocked vast swathes of the city (York, Scarborough, Etobicoke) for high-density, transit-oriented development much earlier.
- The Ecosystem Result: This supply elasticity could have dampened the housing crisis. A more affordable city retains more talent that otherwise flees to the US or cheaper Canadian hubs. You cannot have a thriving startup ecosystem if your seed-stage founders are spending 60% of their income on rent.
3. Democratization of the Talent Pool
Innovation suffers from homogeneity. Currently, the Toronto tech ecosystem is heavily centralized downtown.
- The Constraint: If you live in a “transit desert” (like parts of Scarborough or North York), working at a downtown startup implies a grueling commute, often requiring a car. This filters out socio-economically diverse talent.
- The Ecosystem Result: A subway line is an equalizer. It would have integrated lower-income inner suburbs into the downtown economic engine 30 years ago. This suggests Toronto’s tech sector would currently be more diverse — not just culturally, but socio-economically, bringing a wider array of perspectives to problem-solving (a key driver of innovation).
Here is how a skeptic would push back on the above conclusions:
Assumption: Transit infrastructure drives tech cluster formation.
The Counterargument (The Silicon Valley Model): Silicon Valley, the world’s premier innovation hub, has notoriously poor public transit. It was built on car culture, office parks, and suburban sprawl. The 1990s Toronto plan for Eglinton West was remarkably slow and didn’t initially reach the Pearson airport. Without the “Last Mile” connection to Pearson, the line might have stayed a local suburban shuttle. Would a global VC really take a 45-minute subway with luggage from Pearson to an office at Eglinton and Laird? Unlikely. They would have still taken a car downtown.
The Friction: This suggests that transit is not a prerequisite for innovation. Factors like venture capital density, proximity to top-tier research universities (Stanford/MIT), and favorable tax policies are vastly more predictive of innovation than subway lines.
The Verdict: It is possible that an Eglinton subway would have simply created more efficient bedroom communities (real estate value) rather than economic clusters (innovation value). Tech companies in the 1990s and 2000s might still have clustered downtown due to the “brick and beam” aesthetic and proximity to the University of Toronto, regardless of a subway 5 km north. In the 1990s and early 2000s, Toronto’s “Yellowbelt” (restrictive single-family zoning) was politically untouchable. Even with a subway, it is highly probable that NIMBYism would have prevented the high-density “innovation clusters” we’re imagining.
We see this today: many stations on the Bloor-Danforth line are still surrounded by low-rise bungalows 50 years later. The subway is a tool, but zoning is the hand that wields it.
Assumption: Transit would have solved the housing/talent retention crisis.
The Counterargument (The Induced Demand Trap): Better transit often leads to rapid gentrification. If the Eglinton line had opened in 1995, land values along the corridor would have spiked immediately.
The Friction: The “affordable housing” that creates a safety net for risk-taking entrepreneurs might have evaporated faster along that corridor. The displaced populations might have been pushed even further out, negating the accessibility benefits.
The Verdict: Transit creates land value, not necessarily affordability. If Eglinton had been built, the “inner suburbs” might have gentrified so rapidly that the very “socio-economically diverse talent” we want to include would have been pushed out to Barrie or Oshawa even sooner. Instead of a “corridor of opportunity,” it might have become an “exclusive spine” for the wealthy, similar to what we see in parts of London or New York. Without accompanying aggressive zoning for density (which was politically unpopular in Toronto for decades), the subway might have just spread high rents northward earlier, rather than solving the cost-of-living crisis for talent.
Synthesis
The strongest argument for the “innovation implication” is not that tech companies would have moved to Eglinton, but that productivity would have compounded.
If 100,000 workers save 30 minutes a day commuting for 30 years, that is billions of hours of reclaimed human capital.
In an innovation economy, time is the scarcest resource. The “lost subway” represents a massive, invisible tax on the region’s cognitive surplus.
Don’t Let the Future Get Buried
The Eglinton “what if” proves that infrastructure isn’t just about moving people — it’s about moving ideas. If we want to avoid the mistakes of the 1990s, we need to rethink how we build the cities of the late 2020s.
Join the Conversation: Do you believe transit drives innovation, or is it just a “commuter pipe” for real estate speculators?
