As 2025 unfolds, Toronto continues to solidify its role as Canada’s premier industrial hub, adapting to economic shifts while maintaining its critical position within the North American big-box industrial market. With impressive population growth, robust labor force dynamics, and strategic logistics advantages, Toronto is well-poised to tackle challenges and capitalize on emerging opportunities.
Demographics
Toronto boasts a population of approximately 9.5 million within a 50-mile radius, marking a 9.6% growth since 2020. Within a 250-mile radius, the population exceeds 15.8 million, reflecting an 8.8% growth rate. These figures highlight Toronto as the densest population center in Canada, driving demand for warehousing and distribution.
Key Statistics:
- Local Population: 9.5 million (50 miles)
- Population Growth Rate: 9.6% (2020-2025)
- Regional Population: 15.8 million (250 miles)
This population density not only sustains high consumer demand but also provides a dynamic workforce pool to support industrial operations.
Workforce & Wages
Toronto’s warehouse labor force, currently at 235,000 workers, has expanded by 8.2% since 2024 and is expected to grow by another 22% by 2035. Despite the demand, wages for non-supervisory warehouse workers remain competitive at CAD $19.50/hour, offering cost advantages compared to other North American markets.
Workforce Highlights:
- Labor Force: 235,000 (2025)
- Projected Growth (2035): +22%
- Average Wage: CAD $19.50/hour (USD $14.30/hour)
This growth aligns with Toronto’s status as a key player in the Canadian industrial sector, attracting both domestic and international investment.
Location Incentives
Toronto continues to benefit from strategic economic incentives aimed at fostering industrial growth. Over 100 new deals in the past five years have averaged CAD $100,000 per job, underscoring the city’s commitment to economic development.
Highlights:
- Provincial incentives vary by project scale and location, focusing on job creation and capital investment.
- Local municipalities offer additional support through property tax abatements and infrastructure grants.
Incentives remain an integral factor for companies considering expansion or relocation to the Greater Toronto Area.
Logistics & Connectivity
Toronto’s unparalleled connectivity via highways, railways, and air cargo ensures its role as a logistics powerhouse in 2025. The city provides direct access to seven major highways and two leading railways—Canadian National and Canadian Pacific—connecting it to the U.S. border and other major Canadian cities.
Logistics Infrastructure:
- Air Cargo: Toronto Pearson International Airport handles over 50% of Canada’s air freight.
- Rail Networks: Intermodal facilities in Brampton, Milton, Caledon, and Vaughan support efficient cargo movement.
- Highway Access: Links to seven major highways facilitate seamless regional distribution.
These assets make Toronto an ideal choice for global brands looking to optimize supply chain operations.
Market Performance: Supply & Demand
Toronto’s big-box industrial market, spanning 280 million sq. ft. of inventory, is the largest in Canada and the seventh-largest in North America. However, market dynamics in 2025 reflect a period of stabilization following significant shifts in 2023 and 2024.
Key Metrics:
- Vacancy Rate: Stabilized at 5.2%, following a dramatic rise from 0.8% in 2022.
- Net Absorption: Positive absorption of 3 million sq. ft. after two years of negative trends.
- Leasing Activity: Totaled 9 million sq. ft., with third-party logistics (3PLs) leading the charge.
- Under Construction: 8.5 million sq. ft., ensuring a steady pipeline of new space.
While 3PL providers accounted for 43% of leasing activity, general retailers and wholesalers contributed 35%, reflecting a diverse demand base.
Trends:
- Rent Growth: Stabilized at CAD $15.50/sq. ft., with limited room for further increases in the short term.
- Occupier Behavior: Tenants are prioritizing flexibility, opting for spaces that align with cost-efficiency goals amid economic uncertainty.
Outlook for 2025
Toronto’s industrial market is expected to maintain its momentum through 2025, bolstered by:
- Population Growth: Driving consumer demand and workforce availability.
- Infrastructure Investments: Enhancing cargo efficiency and reducing transit times.
- Stable Vacancy Rates: Offering occupiers a balanced market with ample choices.
- Economic Recovery: Encouraging leasing activity as businesses expand to meet rising retail and e-commerce demand.
While challenges remain, including potential economic headwinds and rising construction costs, Toronto’s strategic advantages position it for long-term growth and resilience.
