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Canada’s Main Streets and Small Businesses Face Uncertainty with Declining Foot Traffic

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Canada’s main streets and small businesses face extreme uncertainty with foot traffic down substantially due to the COVID-19 pandemic.

A new research study, which examined seven of Canada’s main streets, found that foot traffic on main streets has plunged since September with visits down 35 to 70 percent compared to the same time last year and 58 percent of businesses operating with reduced revenues – often less than half of pre-COVID levels.

The research was done by Vancity, Vancity Community Investment Bank (VCIB), and the Canadian Urban Institute.

“Right across the country small businesses are struggling. And if we let them fail, the whole country will be poorer for it. Local businesses form the backbone of the Canadian economy and they have shown determination and resilience during the pandemic. Given the extraordinary measures and investment they have made to continue operating, they are now counting on us to get behind them,” said Christine Bergeron, Interim President and CEO, Vancity, a values-based financial co-operative serving the needs of its more than 543,000 member-owners and their communities, with offices and 60 branches located in Metro Vancouver, the Fraser Valley, Victoria, Squamish, and Alert Bay. It has $28.2 billion in assets plus assets under administration and is Canada’s largest community credit union.

Christine Bergeron, Interim President and CEO, Vancity

Survey Focused on British Columbia & Ontario

The survey looked at blocks in the following neighbourhoods in Ontario and British Columbia: The Beaches in Toronto; Surrey-Newton, BC; Downtown Hamilton; Wexford Heights, Toronto; Downtown Victoria; Strathcona-Vancouver; and the North Shore in Kamloops.

Bergeron said the first round of research showed that small businesses connected to community were doing better. That’s still the base but the foot traffic drop has been so large that they really need that stay local community to take their shopping online because it’s hard to make up for that drop.

“When we did ask what is most helpful to you as a small business, of course we expected perhaps grant programs would be the top but actually what they really want is to see people shop local and to see whether there are any programs that government could help introduce incentives to really drive that local shopping behaviour,” she said.

Key findings from the study include:

  • Downtown Victoria saw almost a million fewer visits from April to September compared to the same time last year. In The Beaches neighbourhood in Toronto, there were 550,000 fewer visits and on the North Shore in Kamloops, a community in the BC Interior, there were 140,000 fewer visits;
  • Business owners in downtown blocks report an exponential increase in vandalism, including graffiti and broken windows, that they fear is keeping local residents off the main street. In Victoria and Strathcona in BC, 77 percent and 67 percent of businesses respectively, said their biggest challenge is increased safety issues in the neighbourhood;
  • More than 25 percent of businesses say that selling more online and through delivery applications have positively affected their business. And while these services have become a significant source of revenue for restaurants, the high commission rates charged by mainstream meal delivery services continues to put a strain on profits;
  • Encouraging local shopping was the most widely cited example of a meaningful support business owners wanted from government (57 percent). It was more popular than creating a more competitive tax environment (40 percent) or better access to financing (20 percent) as the most important thing governments and other main street advocates should do to support them going forward;
  • Over 60 percent of businesses have built an online presence, but the overall loss in visitors – which averaged just below 500,000 for a small two-block segment of a main street – will be difficult to make up for, particularly as public health restrictions are being tightened at the very moment when the holiday shopping season is starting; and
  • There is a growing presence of REITS and large investment companies on main streets, which tend to be less invested in the well-being of businesses and local neighbourhoods.
Mary W. Rowe, President and CEO at The Canadian Urban Institute

“This is a crucial time for our main street businesses. Community members can continue to support their local shops, especially throughout the holiday season. These businesses also need support from all levels of government. The stories, data, and insights from these block studies guide policymakers to implement measures to help main street businesses weather these challenging times. Consumers and government must step in right now and take action to bring back our main streets – the heart of Canadian communities,” said Mary Rowe, President and CEO, Canadian Urban Institute.

“It’s clear from this study that Canada’s small businesses need our support more now than ever before, and there are simple steps we can all take to help out, such as shopping local. By investing in our small businesses now we will be futureproofing our economy in the long run, helping our business owners stay resilient to the impacts of the pandemic,” said Jay Ann Gilfoy, CEO, Vancity Community Investment Bank (VCIB).

Bergeron said people are craving social interaction and want to see their local community thriving.

“The main feedback from this research and what we’re seeing is just really thinking about how to ensure as many people are buying local whenever possible and hope that gets them (businesses) through,” she said.

“We’re on the cusp of a vaccine. There is some light at that end of the tunnel. How do we think about new programs and new initiatives along with getting as many people in supporting these local shops as possible?”

The full research study can be found online here.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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