A report by the Organization for Economic Co-operation and Development says Toronto's traffic problems cost the city billions of dollars every year.
The OECD estimates a loss of $3.3 billion in lost productivity annually because of traffic congestion on streets and highways, coupled with the growth problems associated with Toronto's public transit system.
Toronto Mayor David Miller said Monday he hopes the report will influence federal government policy.
"Cities are where the future economic strength is going to be," said Miller, "and that's really what the OECD report is saying. If Canada really wants to succeed it needs to significantly invest in our cities [and] it needs to encourage innovation."
The OECD report says too many Toronto residents depend on personal vehicles to get around, resulting in pollution and some of the longest commutes in the developed world.
"It points to the importance of national governments .… investing in public transit," said Miller.
The report estimates that 71 per cent of commuters are still dependent on the car.
To reduce the congestion the report suggests toll lanes and congestion charges, as well as fuel and parking taxes.
The report marks the OECD's first review of Toronto's economy.