Why the GTA is Still Facing a Monumental Shortage of Lab Space

I stood on the concrete slab wearing a hard hat, steel-toed boots, and safety glasses while I was four floors above the street. The wind whistled by, as this high-rise still had no walls or windows.


The broker giving me this recent tour of this construction site wanted to know if I was ready to sign a lease. The space—wet labs and offices for biotech companies—wouldn’t be ready for several months.


As I stood there, I realized I had become something I never aspired to be—a poster child. And what, exactly, was the dire cause that I now represented? The lack of lab space in the Greater Toronto Area.

A Growing Company with Nowhere to Grow

My company, Radiant Biotherapeutics, spun out of SickKids in 2020. Last fall, we closed a $35 million Series A round of financing. We’re ready to grow. We’re hiring. We need space. But when it comes to wet lab space in Toronto, it’s a scene out of The Hunger Games—everyone for themselves and the first one to sign gets the prize while everyone else must go without and wait.

Some companies have decided to opt out of The Games. They’ve moved to places, usually in the US, with abundant lab space, or they are considering locations outside of downtown Toronto.

How did we get to this point? Well, in large part, it’s a success story. The biopharma sector in Toronto and the surrounding province is growing. In 2020, life science employment in Greater Toronto was about 44,000 people. This year, in the larger Ontario area, it has grown to 72,000, according to the provincial government, and by the end of the decade, employment in the life sciences is expected to reach 85,000.


But compared to the mega-clusters in the U.S., our biopharma cluster in Toronto is still maturing. The Boston/Cambridge cluster has more than twice the employees as the Greater Toronto-Golden Horseshoe, and about ten times the supply of wet lab space.

The Structural Barriers to Lab Development

As I continued my tour of possible future homes for Radiant, I quickly became an armchair expert in some of the economic forces that have left Toronto in this unenviable position. I see them as a series of tragic mismatches that have stymied the development of third-party office space while startups continue to emerge from hospitals and universities.

Though it seems like ancient history now, there was a dramatic boom in life sciences during the COVID-19 pandemic. Money poured into the sector. But Canadian developers weren’t ready with new lab space.


The money spigot turned off in 2023, and the sector quickly became starved for new capital. After the pandemic boom, there had to be a cyclical rotation out of investment in life sciences, and money went to other sectors. This cooled developer interest in putting up spec lab/office buildings for the so-called graduate class of companies—those ready to leave incubators and lab space at the institutions where they were launched.

In the current cycle, investment in biopharma is picking up, and some companies have money to lease space. But interest rates are up, making it harder for developers to get projects financed. And while fundraising is better than the past two years, graduate-stage companies aren’t landing the mega-rounds of Series A capital that would allow them to sign the five-to-10-year leases that, in turn, would move some of the risk away from the developers of new lab space.

Bright Spots and Policy Efforts

There are some positive signs.

Catalyst, a 155,000-square-foot spec building in the heart of Toronto’s Discovery District, is slated to be ready to start occupancy this summer. While it will probably take tenants another six months to build out the offices and labs to their unique specifications, it’s a bright light that will make a small but meaningful dent in the backlog of demand for space.

Ontario’s provincial government announced the second phase of its Life Sciences Strategy in October. This includes $15 million slated to “reduce the time and barriers companies face when looking to access lab spaces.”

The Ontario Wet Lab Coalition, a volunteer group made up of leaders in life sciences, real estate and academia, conducted a landmark study of the ongoing shortage. The coalition envisioned one novel way to help ease the shortage: create a mechanism through which life science graduate companies would have to pay lease insurance, much as first-time homebuyers with small downpayments must purchase mortgage insurance. The insurance would protect developers from some of the risks of building lab space projects, making it more attractive to start building. While the system did not get off the ground—we’re looking at you, property developers and insurance underwriters—the program represents the kind of outside-the-box thinking that could help jumpstart more spec development.

It needs to become a reality. Daniel Lacey, head of the life sciences practice for broker CBRE, says, “We don’t have a clear investment vehicle to support the derisking of lab spaces of 20,000 square feet or greater.” There’s too much opposition to what may be perceived as using government money to subsidize large real estate investors such as pension funds and real estate investment trusts, he says.

The Cost of Inaction

But the status quo is a losing path for everyone.

“We need to do something significant here or we’re going to continue to lose companies to the US,” said Maura Campbell, Ph.D., president and CEO of OBIO, a trade group for life science companies in Ontario. (Dr. Campbell also co-chaired the Wet Lab Coalition.)

It’s not an exaggeration. Last August, Dr. Campbell and representatives from some of Ontario’s most promising life sciences companies signed a letter to the Ministry of Economic Development, Job Creation and Trade. In it, they said that the difficulty in leasing lab space could lead them to possibly leave Ontario or expand in a market with better access.

One of the signers of the document was Jo Hulme, Ph.D., Radiant’s chief scientific officer. Jo is eager to move her research team out of our current labs, generously offered by the Hospital for Sick Children (SickKids), into new, more spacious quarters.

The 2022 “At the Tipping Point” report on the lack of wet lab space from the business development group Toronto Global summed it neatly. Without lab space, federal, provincial and local efforts to build a life science sector come to nought: “(A)ll the public policy payoff in terms of jobs, tax revenues, etc., are lost if companies cannot find the required space to scale here.”

Staying the Course in the GTA

What does all this mean for Radiant? We’re dedicated to maintaining our labs in Greater Toronto, and that means we continue to look for space. Radiant Bio has been lucky. As a spinoff from SickKids, we’ve been able to use the hospital’s lab space as we’ve grown. That’s kept us competitive as we’ve been raising capital, advancing our novel antibody platform and building our team.

But it’s time we had our own space. And we don’t want to leave Toronto. A move to space outside Greater Toronto would be disruptive to our talented team of researchers. So we’ll continue to compete with other graduate-stage life science startups for scarce lab space. As they say in the Hunger Games, “May the odds be ever in your favour.”

It’s time for the city, province and federal governments to redouble their efforts to bring more wet lab space online. Right now, the shortage is throttling the growth of Toronto’s dynamic life science cluster.