The Agenda with Steve Paikin (Audio) - Are Special Economic Zones Redefining How Ontario Governs?

Episode Date: April 3, 2026

Under Bill 5, the Protect Ontario by Unleashing Our Economy Act, the Ford government gave itself new powers to create "special economic zones," promising faster development and fewer regulatory hurdles. Those powers are now being tested at Billy Bishop Airport, where the province is considering expropriating Toronto's stake, overriding a decades-old governance agreement, and declaring the site a special economic zone to accelerate plans for jets. To probe what this shift means for economic growth, democratic oversight, and environmental risk, we're joined by Pedro Antunes of Signal49 Research, University of Toronto professor Jessica Green, and Ontario Chamber of Commerce CEO Daniel Tisch.See omnystudio.com/listener for privacy information.

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and series that made navigating life in Ontario a little easier, TVO's commitment to lifelong learning has stood the test of time. Renew your support now and help preserve this legacy. Visit TVO.com.me slash 2026 renewal to make your donation today. Toronto's island airport could be about to change in a big way. If you haven't heard, Premier Doug Ford wants to bring Jets to Billy Bishop. He's looking to declare the site as a special economic zone, which would let the province

override municipal and provincial laws to fast-track development. Now, the idea of Jets of the province's third busiest airport has been controversial for years. This time around, it's no different. Here's a post from the chair of No Jets TO. Critics have raised concerns about noise pollution and environmental impacts, along with the impacts on housing plans in the area. Most Toronto City Councilors aren't happy. And this week, the Prime Minister weighed in with some mixed signals.

He isn't openly endorsing it, but he also isn't openly opposing it. It's a very interesting vision, big possibilities there. So we're going to unpack how special economic zones work and what's at stake in the fight over the state. the future of Toronto's waterfront. This is the rundown. As part of Bill 5, the Protect Ontario by Unleashing Our Economy Act, which passed last year,

the province gave itself the power to declare special economic zones. So what are they? And what are the risks and benefits? Pedro Tunez is the chief economist at Signal 49 Research, and he joins us on the line. Pedro, how are you doing? I'm good, Dan. Thank you. Help us understand here special economic zones. How do they work?

Well, I think traditionally a special economic zone is meant to kind of spur, is a zone demarked, I guess, by a government, and is intended to spur new investment. And typically how they would do that would be to offer up better tax incentives. They may offer, you know, reduced import duties if you're operating with it, within that zone. They may reduce regulatory requirements. There's all sorts of, or, you know, perhaps allow for cheaper labor, as we've seen in some cases. Most of these are typically set up in developing economies when they're just trying to spur that investment and kind of adjust the rules a little bit to spur the investment in a localized area. Help us understand. Are these zones,

really, are they geographic zones? Or could they be something that you could put on a blanket, say on an industry in itself? Well, I guess you could sort of apply them more broadly to an industry, but generally speaking, they have been signed a specific area. You can think about China, for example, for, you know, as they were transitioning from essentially an agricultural, rural economy, they were transitioning to what they have become, which is the manufacturing hub of the world.

They were essentially trying to move people to, essentially to cities, to densify, I suppose, special areas. And so they were allowing for these zones to have essentially advantages in terms of, be it access to energy, be it access to housing, or be it essentially special rules around tax and other policies. Now, with the passing of Bill 5,

protect Ontario by unleashing our economy, last summer, the provincial government has received a lot of flack for using special economic zones. Why would that be? Well, I mean, I think it's a personally, on a personal level, I think it's a bit of a disappointment that we cannot kind of level the playing field across the board and entice investment in that way. So the provincial government here is looking to try and essentially really the zones in Ontario are really focused in, I think, on resource development. And of course, we've heard about the airport as well. But I think it's essentially to facilitate and expedite investments really around

the environmental review process, perhaps around permitting, perhaps around lessening some of those rules as well, not just the review process itself, but maybe facilitating investment by lowering some of the standards or rules. So we're not quite sure here what's going to on specifically, but I think the general intent is to really expedite resource projects in general. Now, special economic zones seem to have come into everyone's lexicon since the premier had started announcing it with Bill 5, but of course he did not make up this concept. You had mentioned China as one example, but where else in the world can we see special economic zones?

Well, in fact, I was surprised just in preparing here for our talk today as to how widespread they are. I mean, they are pretty much used across the world in many different countries. But again, when we come back to developed economies, this really segments. You know, it's another problem in terms of segmenting the market, not having a uniform playing field, not allowing for investment to occur where it's more efficient. And I think in the case of the resource projects themselves, unfortunately, what we're trying to do here is pick an area where we want a development, where perhaps there is an economic case to be made for a mine,

and we want to kind of bend the rules a little bit for that area to kind of promote that investment. When I try to look at how we're doing in terms of our internal trade barriers, you know, when we go back to the one Canada, the one Canadian economy bill that the federal government is trying to push to expedite projects as well, it really is to try and unify our market. And I think this is unfortunately something that maybe, it will be effective in expediting some resource projects,

but in the bigger picture, it is going to segment our economy even more. Well, let us understand from a provincial standpoint, are there other provinces that are using it or have discussed using the strategy? Well, I mean, Bill C5 is the only one right now in Ontario that actually has defined especially economic zones. We haven't seen that anywhere else. Alberta has been, the Alberta government has been discussing doing so as well, but we haven't seen anything implemented.

And again, I go back to an economy like Australia, which has been much more successful in attracting investment. It's an economy that is parallel to ours, very similar in many respects, has had a much better productivity performance over the last few decades, and they have no special economic zone. So I think we should really be wary about implementing these, these policies. Well, with that being said, you know, critics have said, in theory, these zones sound like a positive

move for industrialization, but in reality can be quite difficult to actually implement. What are some of the negative implications that have occurred globally? I think if we just look at the continent of Africa, we can see a couple of examples there. Can you walk us through some, I guess, some fails when it comes to these zones? Well, I think it goes down, it goes back to this segmenting. the market. It goes back to a race to the bottom on environmental review, on environmental rules. And of course, it can lead to and end up with, you know, things that are essentially disastrous on the environment. Just more broadly, though, we've also seen segmenting the market,

you know, essentially creating rather than unifying an economy and strengthening it in that way, we've seen a situations where we are segmenting an economy and just creating more, you know, as we live here in this country, difficulty around creating that one market, around having firms able to conduct business across the entire economy and thus becoming bigger, more productive, able to invest more. These are all of the challenges that Canada has been facing over the last number of decades, I would say. And I don't think these are necessarily a solution. Another factor that we haven't really talked about is labor. When we're talking about, you know, developing nations,

a little bit harder to accomplish some of these things here in Canada, I imagine, with just labor practices in comparison to other countries. Well, that's it. I mean, you don't want to start to reduce labor standards. I've been talking more about environmental standards, you know, or rules. You don't want to slack in those, but you don't want to slack in labor standards. either. And I think we've seen some examples of that. I mean, just, you know, in Mexico, they have the

Machia Dora example, which is essentially focused on manufacturing to service the very large U.S. economy, just north of their border. And so, you know, there are especially economic zones that have been set up. Some would say with some success, because they have seen manufacturing increase there. But at the same time, it's prevented that kind of, how should I say, enrichment, that increase in productivity that would allow for stronger wages as well. And, you know, now the U.S. is pushing back against trade with economies that have essentially cheaper labor. So, again, this creates this kind of sense of race to the bottom, which is not necessarily

a good thing, both in terms of tax or in terms of these kind of labor standards or environmental standards. Pedro, we are going to have to leave it there, but I really appreciate your time and your insights on this. Thank you very much. Well, it's my pleasure. Thanks for having me. Since 1983, the Billy Bishop Airport has been governed by an agreement signed by the city, a federal agency confusingly called the Toronto Port Authority and the federal government. Now, Premier Doug Ford wants to expropriate Toronto's share and declare the airport a special economic zone to speed up his plans for jets. Jessica Green is a professor in the Department of Political Science

and the School of the Environment of the University of Toronto. Daniel Tisch is the president and CEO of the Ontario Chamber of Commerce. Great to have you both here. Thank you so much. Great to be here. Thanks for having us. Let's talk initial reactions, Jessica. Premier Ford's plan to expand Billy Bishop Airport. What are your thoughts?

I don't think it's a plan yet. I think it's an announcement. And I would like to know what the plan is, and I would like to know what the numbers look like. So, you know, generally in public policy, we have a proposal. We do cost-benefit analysis, and we see how the numbers shake out. And I, you know, I think that there's a lot of purported economic benefits, but there will be a lot of costs to the city of Toronto. And I think we need to spend some time thinking about looking very carefully at what those are.

All right. Daniel, we'll talk about economic benefits and numbers, obviously announcement, not a plan. But perhaps some excitement. Yeah, I mean, I think we all know people who live in Toronto, people who live actually across Ontario, who use Billy Bishop Airport to get into Toronto easily, to do business, to, you know, tourism, to connect to other places, to connect opportunities. They know the value of this airport as a core economic asset of our city

and a way to get in here. And so it's critical to jobs, to investment, to the competitiveness of our entire urban region. and I even say our country. So, yeah, I mean, we believe that there is a place for responsible expansion of the airport. And I guess what we'd like to ensure, of course, is that there be appropriate local consultation,

that any changes be subject to very high environmental standards, and that it be part of an integrated vision and plan for the Toronto Waterfront, right? And I think for us, those are the three guiding principles, but I think it's quite exciting to see at least a very important. vision, but I agree with Jessica. We've got to see a lot more details. And there's got to be dialogue. There's got to be analysis, and it has to make sense, but we're certainly encouraged by what we see. Now, I wish we had the Transportation Minister sitting across from us so we could

talk about it. We did invite Minister Pramit Zakaria on the program, asked for a statement. Unfortunately, declined her invitation and did not send a statement in time for our broadcast. We did, however, get a statement from the Toronto Port Authority, which is the federal agency that owns and operates the Billy Bishop Airport. So I want to read a part of their statement. It reads, the Toronto Port Authority is in the process of developing a plan based on its vision for the future of Billy Bishop Toronto City Airport. Our vision is grounded in three pillars, innovation, operational excellence, and community. We believe that progress in aviation must translate into tangible benefits for the people and businesses we serve, and that includes expanding

connectivity, responding to population growth, and rising aviation demand, strengthening tourism in trade and embracing modern aircraft that are cleaner, quieter, and more efficient. Daniel, what would more efficient aircraft look like? Well, I think more efficient aircraft would be obviously more environmentally sustainable. It would be quieter. And I think part of the challenge that, from my understanding of the issues related to the airport today, is that it is governed under a tripartite agreement that goes back to 1983. and that the agreement specifies what types of aircraft can be used.

It's an outdated agreement from a long time ago. And our view is that rather than specifying the type of aircraft, it should be specifying the standards that the aircraft have to meet. And I think that's a sensible advancement because they piloted, for example, all-electric aircraft, but they can't fly them, right? And so, you know, this is a process that needs to make sense. It needs to be, it needs to follow the appropriate protocols, the appropriate local consultation dialogue.

But I think that there's an opportunity to modernize that governance agreement. And so that sets the rules of the road. And then once we have the rules, then we can have the dialogue. All right, Jessica. So I'm going to be a little bit contrarian here and say that. That's your rule. That's my rule, too. Right. We're, you know, we don't have sustainable aviation yet. It's actually something I study in my work. There's no such thing as like long-haul electric flights. There's no such thing as carbon-free aviation. We're in the middle of a climate crisis. And we know actually that jet fuel is really bad for people. There's a lot of studies that, you know, show that there are extremely fine particles that are put into the atmosphere and into the air.

air, when you combust a jet fuel, and that's not good for people. So I think when we say sustainable aviation, we have to be very careful about what we're actually talking about and what the knock-on effects in air pollution will be to the people of Toronto and particularly to people around Billy Bishop Airport. All right. I mean, let me just jump in, though. Like, I think it's important, and I don't necessarily disagree with you. I think we've got to do the math and the analysis. But what I'd say is that the, if you look at long-haul flights, you know, that's always going to be the role of Pearson, right? You know, I don't see a future where there are long-haul flights for Billy Bishop Airport,

right? The other thing I'll say is that, you know, part of our mandate is looking at prosperity for local communities around Ontario, right? And so we've got 60,000 businesses in our coalition from, you know, 145 different local chambers representing business of every size, every sector of the economy, every community in Ontario. And they rely on this airport, right? The other reality is that we are going to have massive population growth, Jay, and you were alluded to it a moment ago, right? You know, there are going to be four million more people in Ontario by 2050. About half of those will be here in the

GTA. And having, saying, Pearson can accommodate all of that, it's not realistic, right? You know, Pearson, I think, you know, there's a place to look at these two assets we have and look thoughtfully at each one and the role of each one, right? And obviously, there's got to be high standards that are met. And we'd like to ensure that it's part of a plan for, you know, a clean, green waterfront. And I think that that's something that we need to talk about as a community and as a province as a country. You mentioned standards. So I do need to ask, you know, Premier Doug Ford has declared Billy Bishop Airport a special. special economic zone. And so there are some people have some concerns about what that would mean.

We talk about the environment as well. Help us understand why would Billy Bishop Airport be an economic zone. Why would that be something that Doug Ford would like? Well, I think, again, if that's the premier, but I think that what I interpret from the announcement is that they're saying this is a high priority, right? And I think it's important to understand that when you create a special economic zone, whether it's provincially or federally, they use different terminality. federally, major projects or projects of national interest. But it's not a get-out-jail-free cart, right? It's more like a nexus card.

So you still have to meet certain standards. You still have to go through security. You still have to go through all the protocols to ensure that we're making the right decisions and the right tests are met. But it's saying this is a priority. We're going to put it to the top of the list and we're going to accelerate every step of the process.

But it cannot be an excuse for short-circuiting the process. or having a process that lacks rigor. All right. There's environmental costs that you're flagging, but there's also some social implications as well. Yeah, so there's environmental costs, there's traffic, right? Let's, you know, everybody hates traffic in Toronto. That's going to get worse unless there's a lot of investment put into public transportation

and other kinds of changes around Billy Bishop Airport. We just had a budget with $13 billion deficit. So, again, the question is resources are scarce. Is that where are we going to spend money to make those upgrades? So that's another problem. There are definitely social costs, right? I mean, I would argue that the Toronto Islands are a treasure for this city. Last summer, a lot of my friends were going crazy because Ricky Gervais was live tweeting from the island saying this is my favorite thing about Toronto.

So, like, you know, if we have jets flying over that, that's going to be a real cost to, you know, the kind of the beauty and the pristine. nature of that resource. At a time that, you know, we, it's a public space. At a time that we're in an affordability crisis, you can just go and hang out and spend the day, not spend any money. It's home to the oldest queer space in North America. So I think there's a lot to be said for protecting the islands. There's a school there. So I think there are a lot of costs. Again, these are local costs and the question is what is the benefit and who gets it. All right. I'll get Daniel to respond there. Well, and I guess where I think we're aligned, you know, to some extent, I think, is that there has to be an integrated vision for the waterfront. There's got to be integrated planning so that we're looking at the whole picture. The waterfront has transformed, I think, in a really magical way in the last 20 years, right? And I have to say, you know, 20 years ago, I was very skeptical of the airport's expansion, right? I was, you know, I remember advising Mayor Miller at the time, you know, as a, as a voluntary.

And we talked a lot about this. But I think the reality today is that the airport is now very well integrated. It's a good neighbor. It works with the local community. And you're seeing a waterfront that is a really beautiful place right now. Nobody wants to see that disappear. And I think, so we need integrated planning, but I think we also not just focusing on the cost, we need to focus on the economic benefits, right?

You know, not just to Toronto, but to the entire province, to the entire country, right? And I was looking at the numbers, again, these numbers have to be validated. But right now, this airport is responsible for $1.8 billion of economic output and supports 9,000 jobs. So by some estimates, you know, by 2050, this could be worth $8.5 billion to our economy, right? So that's jobs, that's quality of life. That's also creating essential connectivity to communities all over Ontario. It also supports, of course, medical access, right? you know, getting patients, you know, to our hospitals and getting great health care through

Hope Air or Orange. So there's a lot going on, but we have to plan in a holistic and integrated way to ensure it sustainable. Now, when you talk about the connectivity, I do have to ask, you know, some critics have been saying having one centralized hub for transportation helps drive urban growth through dense networks of connectivity. Why not look at Pearson? If we talk about, you know, our connectivity, we can look at the App Express. We can look at the Eglinton-LR-T that can get you straight to Mount Dennis, up there. There is the infrastructure there. We've all used the airport.

We know it's one way in, one way out when we talk about traffic there. So why not? Just stick to Pearson. Every great city in the world has an integrated approach to planning its transportation network, right? And there's a role for Pearson. There's a role for Billy Bishop. I mean, Pearson, by I think early 2030s is going to serve 65 billion passengers, right? So, and again, I think we can separate what needs to happen in one place,

the other place. They're never going to be jumbo jets at Billy Bishop Airport, right? I mean, so long-haul, Pearson will be the place, I think, for long-haul flights, for cargo and, you know, freight, and whereas Billy Bishop is a place for passengers. It's a place for connectivity. It's a place for shorter-haul flights, more of a destination and a hub for regional travel, right, across Canada. And the other point, I think, is that, and I'm, you know, we've been really strong advocates for transit, you know, including, by the way, high-speed rail, which is another project that's getting attacked a lot. You know, we put out a statement on that yesterday. And I think that it is really important that we integrate transit planning into this. And part of the critique I'd

have of the city right now is they're kind of ignoring the airport, almost, and we need to talk about how we build good transit to the island and the airport, right? And most people don't drive to Billy Bishop, right? Right. I got to catch her out there because I do want to talk housing, transit as being the other thing. Let's talk housing because Toronto's waterfront plans have about 30,000 new homes in major infrastructure that is going to be, and submit an upgrade to sewers and all of that just to the east there from all levels of government. If the airport expands, what happens to those plans? So I don't know. I know there's been some discussion about flight paths and the height of new development, so it seems like there may be some concerns

there. I do know that they will be in the sort of area, which is about 15 kilometers for these ultrafine particles. So like, you know, and subject to the noise pollution, right? I sort of tried to think about this as like a low key version of the air show kind of going on all the time. So I think it's going to diminish, I don't know about property values, but it will diminish the sort of, you know, quality of life in proximity to a lot more air traffic and potentially like potentially jets, right? That's, That's what's on the table. So I think we need to be clear about what's being proposed here. So I think it could be a big problem. Where we would come in on this is just saying, you know, let's set the standards, right? Like, you know, reform the governance and then have the discussion, have the dialogue about what standards we as a community, we as citizens, expect the airport to meet, right, and challenge them to meet high standards. I think that's important.

Sorry, real quick. You know, again, we've got to see the science on this, right? But, you know, I've also seen data before suggesting that the waterfront, where the airport is, actually has less pollution than many parts of downtown Toronto. And so I think we've got to look at this and have an informed debate, a fact-based debate, looking at economic costs and benefits, and looking at environmental opportunities as well. So it's part of that integrated. All right.

Last question to you both here. what would it take for all key players in this to work together? Daniel talks about sort of the standards that need to be discussed, but what would it take to have all key players here? So I think I want to go back to the standards point. I think that if you care about doing this responsibly, if you think that that can be done, I am not convinced that it can,

then invoking Bill C5 and talking about special economic zones is not the way to do it, right? Because this will have real economic and quality of life costs to the city of Toronto. And you want to make sure that everybody does get a seat at the table, including city council, which has been, you know, pushed out of this conversation, including the mayor, including the federal government, which has been, you know, not really touched this with a 10-foot pole. So you need to get all of those people around the table. And pushing this through with even a nexus card is not the way to do that. So I think we need to think about that.

And we need to think about this holistically. Is Billy Bishop really the best place? Do we want to have a different airport that's maybe not in the way? center of downtown. You know, there have been proposals to have airports at Pickering or, you know, some, Hamilton, other places. So I think that there is, if you want to have a holistic conversation, we need to have all the actors around the table. And I think Toronto needs to have a real strong voice here because Toronto will bear the costs and the island will bear the costs. Daniel, get the last word here. Yeah, well, look, I think, I certainly agree we need to have a

holistic conversation and that everybody, there needs to be a place for everybody at that table, right? As I said, you know, at the outset in the very first question, right, local consultation, high environmental standards and integrated planning, you can't do that unless you have all parties involved in the appropriate way. So I think on that, you know, completely agree. You know, we have to talk about the costs and we also have to talk about the benefits, the economic benefits, the social benefits, the opportunities for more people across our province to get to Toronto more easily. And Toronto will enjoy a lot of benefits from this as well, which is why Torontoians overwhelmingly support the airport and use the airport.

It's been there for 80 years, right? So, you know, the costs of closing it down and building one elsewhere, where are we going to build it, right? Like, it's important to think of those costs that we will all bear as well, right? So let's work with what we have. Let's maximize the value of these assets in a way that's responsible and sustainable. All right. You're going to leave it there. Daniel, Jessica, really appreciate your time. Obviously, we mentioned it's just an announcement. when the plans come out, perhaps we revisit. Thank you very much. Let's see the numbers.

All right. Thank you, Jayne. Thank you. Thank you. Thank you, Jessica. I'm Jayne. Thanks for watching The Rundown. What do you like or not like about what we're doing so far? Send us your feedback at tbO.org slash rundown feedback, or you can always leave us a comment on YouTube.

Until then, I will see you next week.