The Ontario government, in consultation with the Chief Medical Officer of Health, is extending all COVID-19 orders currently in force under the Reopening Ontario Act until January 20, 2021.
The announcement came the same day (Thursday) that iconic Canadian retailer Hudson’s Bay issued a statement related to its application for a judicial review of the current regulations governing non-essential retail in Toronto and Peel.
Hudson’s Bay Calls for Judicial Review of Ontario COVID-19 Regulations
“The Ontario Government’s health data shows that retail shoppers are not contributing to COVID-19 spread in any significant way. On behalf of thousands of large and small retailers in Toronto and Peel, we have been left with no choice but to ask the Court to recognize the unfairness of the current situation and the need for a fair and evidence-based solution that puts health and safety first and doesn’t jeopardize the livelihoods of thousands of retail workers, or the future of many businesses,” said Hudson’s Bay.
“Last week we signed an open letter, along with 46 other retailers of various sizes, to advocate for a 25% capacity limit on all retailers across the province as a means to achieving better public health outcomes with less economic fallout and unfairness. The decision to close some retailers in these regions has not achieved public health objectives. Rather, it has potentially increased health risks by funnelling more shoppers into fewer, increasingly crowded stores. Public health evidence regarding the importance of physical spacing and other health measures supports doing the complete opposite.
“The Government’s approach is unreasonable and unfair, does not support our shared public health objectives and is causing undue stress and hardships to thousands of retail employees and businesses across the region. The situation is dire and untenable for thousands of retailers but it’s not too late for the Government to make a better decision for Ontario, the local economy, public health, and the millions of citizens who live or work in Toronto and Peel.”
In a statement, Solicitor General Sylvia Jones said safeguarding the health and well-being of Ontarians remains the government’s top priority at every stage of its COVID-19 response.
“As we prepare to implement a safe and effective immunization program, extending these orders will ensure tools remain in place to address urgent public health situations until all Ontarians can be vaccinated,” she said.
“Having said that, there are some retailers such as those that sell fitness equipment and gyms that count on January as a prime sales/recruitment month. We could see crowds though at essential retailers as customers return products that were bought for the holidays,” he said.
“Those non-essential retailers that participate in Boxing Day and Boxing week activities will be disadvantaged as will restaurants that use New Year’s Eve as a major sales driver.”
Dan Kelly, President and CEO of the Canadian Federation of Independent Business, said the organization is supportive of the principle behind the Bay’s lawsuit.
“Our preferred outcome is different than theirs but the principle behind saying Costco and Walmart can open and yet retailers cannot we support what the Bay is saying,” added Kelly. “It makes no sense to prohibit buying clothing at the Bay or Susan’s Ladieswear but to allow it at Costco and at Walmart. So we support the principles behind the Bay’s lawsuit.”
Gary Newbury, a retail supply chain strategist and serial transformation executive, said the alleged court action being mounted by The Bay to the government will be watched by many retailers to see the quality of the argument and any potential success.
“If they are successful, which is unlikely, there will be a class action which could bankrupt the province. It has been a concern, with various federal schemes to help retailers through this situation, this is simply not adequate with too many retailers having to dip into their own funds and pockets to weather this storm,” he said.
“When the state imposes closure, there has to be some logic, just as when you cause damage to a neighbour’s property, you create a path to be liable for all reasonable consequential losses. If we think of it this way, the government is using emergency powers to “flatten the curve” on the demand for ICU services. One could argue the state should, through it’ pandemic planning protocols in previous years, thave established the requirements, in absolute numbers, for ICU wards for pandemic management and had a fiscal plan over several years to ensure their provision. If the governments in Ontario have chosen not to do this, then the closures, surely could be argued under the tort of negligence in which case, there is a risk of a substantial class action, and other provinces will be watching this situation develop.”
Newbury said any closures which impact any time between Black Friday through to the conclusion of January sales, including Boxing Day sales, will be devastating for any independent or chain retailers, not deemed “essential”.
“This is traditionally a very busy time for retailers, in a normal year they would plan to make 80-90 percent of their profit during this short window, and given most were locked down for two to three months during March – May, they would have been looking forward to getting a clear run to try and regain their cash flow during this time,” he said. “For those retailers who have moved their operations to a split of online and in store, they will find the costs of processing returns prohibitive if they have to close their stores, especially if they have been offering free returns via the store channel. All they might be able to negotiate is a longer returns deadline. The challenge with this is consumers may be worried they will not be around to get their money back and be engaging their credit card companies to reverse the transactions due to situations beyond their control.
“After the investment many retailers, especially the independents have made in being COVID-19 secure, they will feel severely let down by the Ontario government. The extra protocols have had to be funded out of their own scant cash flow, but it would have been done on the basis that “at least we can keep trading as we enter the holiday peak”. This extension to 20th January will force many to shut up shop permanently while their “essentially classified” competitors will be seen to gain a free pass to the party. Although COVID-19 is a real risk for community spread, the medium-term consequences to society’s view of public spaces is going to be transformed substantially. Anyone given to a degree of nostalgia will not be wanting to visit main streets, strip plazas and malls full of boarded up store fronts and tumbleweed, worsening the situation for those that struggle through this localized retailing apocalypse.”
Recently an open letter to Doug Ford, Premier of Ontario, and Christine Elliott, Deputy Premier of Ontario and Minister of Health said:
“Dear Premier Ford and Minister Elliott, about 47 retailers, including the Bay, wrote that “Ontario’s policy of segregating ‘non-essential’ retailers from those deemed essential might actually be making things worse” for the economic recovery.”
Current Policies Push Canadian Consumers Towards Big Box Retailers
The letter said the current policy pushes more Canadian consumers to a handful of big box retailers and discount stores, thousands of small, independent and local stores sit shuttered, with their hands tied, even though many sell the very same goods.
Canadian retail businesses are being destroyed and tens of thousands of jobs are being lost. This, despite the fact that only 0.2 percent to 0.9 percent of recent weekly cases related to outbreaks have been associated with retail environments, according to the Government of Ontario’s own statistics, said the letter which was dated December 1.
It added that retailers of all sizes are being forced to lay off good people in hundreds of stores closed by an ineffective policy. Rather than hire thousands of temporary workers to handle the holiday rush, so-called non-essential retailers will hire zero. Once lost, many of these jobs won’t return.
“We ask that you move immediately to open all retail in Ontario, and impose a 25 percent capacity limit on ‘non-essential’ retail in lockdown regions, just as several other provinces have done, all with guidance and support from public health officials. This will put fewer people in more stores, increasing safety for all. The current policy does the opposite,” said the letter. “Together with mandatory mask policies, social distancing, hand sanitization and the numerous other safety measures already in place, capacity limits can further reduce the potential for community spread while enabling more businesses to stay open across all regions during a make-or-break season for retail businesses.
“Large and small retailers need each other to create a vibrant retail ecosystem. Collectively, we are asking that you join with us in common cause and a shared commitment to keeping Ontario families safe and secure through this extraordinarily challenging period. Capacity restrictions backed by strong social distancing and other safety measures already in place will deliver better health outcomes in a way that is effective, fair, saves jobs and supports local businesses and families.
“On behalf of our respective companies, members and all of the various businesses and individuals that depend on the retail sector for their livelihoods, your thoughtful consideration and bold leadership on this matter will be greatly appreciated.”
In a news release, the Ontario government said the extension of all orders currently in force will support the safe delivery of health care and other critical services until COVID-19 vaccines are approved and widely available.
The government said amendments to the ROA, which came into force December 4, permit indoor farmer’s markets that primarily sell groceries, to be open. For post-secondary institutions, the amendments increase the limit on the number of persons permitted in an instructional space at any one time for in-person instruction or in-person exams from 10 to 50 people for certain programs critical to supporting the health care workforce as set out in the order.