So Much More: The Economic Impact of the Toronto Public Library on the City of Toronto

Published December 2013.

Overview:

The results of Toronto Public Library’s economic impact study clearly demonstrate that Toronto Public Library delivers a strong Return on Investment, through the delivery of library services that enhance Toronto’s competitiveness and prosperity and contribute to a better quality of life for all. This study is the first Canadian public library study to measure in concrete economic terms the Return on Investment for library service.

Toronto Public Library creates over $1 billion in total economic impact 

For every dollar invested in Toronto Public Library (TPL), Torontonians receive $5.63. This benefit results from the market value of services delivered, or direct tangible benefits and the stimulus to Toronto’s economy from direct spending and re-spending (indirect tangible benefits).

Direct tangible benefits represent a conservative measure of the market value of the services used. Direct spending represents institutional spending that directly impacts Toronto’s economy and is the total funding received from the City of Toronto. Indirect tangible benefits represent the re-spending by those who are paid by the direct spending within Toronto’s economy.

Exhibit 1 shows the breakdown of the total economic impact from the library. Direct tangible benefits for individual library services are provided along with the total direct spending and total indirect tangible benefits. Just over half of the total impact is from providing free access to books and other items of the 11 million in the TPL collection. The remaining total impact is divided between the value of the other library services, total direct spending, and the indirect tangible benefits created by the direct spending. The centre of the exhibit shows the value of the total economic impact for each household within the City of Toronto ($955), and for each of Toronto’s residents, of all ages ($358).

The total economic impact and impact per dollar spent are impressive results, and are in the same range of values found in published studies of other library systems from around the world.

Exhibit 1: Toronto Public Library creates over $1 billion in total economic impact

 

Toronto Public Library creates over $1 billion in total economic impact

 

For the 72% of Torontonians who use library services, the total direct benefit is as much as $500 ($502.15) per library member (Exhibit 2).

Exhibit 2: Total direct benefit as much as $500 per member

Total direct benefit as much as $500 per member

The analysis shows that on average one open hour at any of the library’s 98 branches generates $2,515 in direct benefits that are only possible because that branch is open. Exhibit 3 summarizes the average benefit of a branch being open for one hour. The $626.8 million in benefits is only those direct tangible benefits that require a branch to be open in order for the specified services to be available. In 2012, TPL branches were open for nearly 250,000 hours. Given $162.8 million (minus capital and eTitles) in direct spending used to fund those benefit-generating services, the average open hour costs approximately $653. Therefore, the average benefit is almost 4 times the average cost.

Exhibit 3: The average open hour at a branch generates $2,515 in direct benefits

The average open hour at a branch generates $2,515 in direct benefits

Return on Investment is 463%

The return from the City of Toronto’s investment in the Toronto Public Library is 463%, which is the midpoint of a range very conservatively estimated to be 244% and is comfortably shown to reach 681%. Exhibit 4 shows this range, as well as the itemization for the direct tangible benefits, direct spending, and indirect tangible benefits.

Torontonians receive $680.8 million in direct tangible benefits from services used by residents across the city. Annually, Toronto Public Library spends nearly $200 million with $177.9 million provided by the City for direct spending. The difference includes monies received through provincial and other grants, the TPL Foundation, fines and fees, and other sources. The Toronto Public Library generates $142 million in indirect benefits to Toronto’s economy from library spending on infrastructure to improve local branches, collections to provide access to reading, and staff to support service delivery.

Intangible benefits deliver value

The City of Toronto’s strategic plan for economic growth focuses on Toronto’s competitiveness and prosperity, and highlights the trends of an aging population and declining birth rate as creating a new reality for cities and regions across the world. The strategic plan emphasizes that, in order for the city to prosper in this reality, Toronto must foster collaborative strategies to develop workforce talent through education and lifelong learning, and attract workforce talent through immigration.

Toronto Public Library delivers services that contribute in many ways to the City’s goals for economic growth and prosperity, and generate intangible benefits which do not have an easily quantifiable value, but create significant value for residents. This value includes opportunities for residents to improve their literacy skills, enhance their educational and employment opportunities, and improve quality of life for themselves and their families through library collections, services and programs. These outcomes deliver a lifetime of value to residents and increase the economic competitiveness and prosperity of Toronto. The library’s strategic alignment with the City’s plans for economic growth, combined with conditions that support livability and quality of life for residents, create an attractive climate for business investment and support a sustainable cycle of prosperity.

MPI followed a thorough, comprehensive approach to calculating the economic impact of TPL services

The Martin Prosperity Institute (MPI) conducted the study for Toronto Public Library using accepted valuation methodologies commonly used in studies in the library and public sectors, and standard library statistics collected for international and Canadian benchmarks. The study examined the economic impact of the Toronto Public Library through a number of lenses, building on methodologies of other studies and introducing new measures to value library space. The study was written in response to a request from the Library Board and City Council to conduct an assessment of the economic impact of Toronto Public Library services and the incremental impact of one open hour.

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