Small businesses across Canada are feeling the financial crunch from coronavirus restrictions that have millions of people taking refuge from the virus outbreak by staying at home and avoiding unnecessary shopping trips. That’s according to new research published by Vancity, VCIB, and the Canadian Urban Institute, that assesses seven of Canada’s main urban streets and quantifies just how much small businesses and local neighbourhoods are struggling.

The research study 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.

Insights from April to July showed that despite the pandemic, the business community had the space to find innovative ways to adapt during the summer by taking advantage of conditions such as relaxed restrictions and lower COVID-19 case numbers. Strong local economies and connections to the community were also helping businesses fare. However, visitation data shows foot traffic on main streets has fallen since September with each block reporting visits to be down between 35-70 per cent compared to the same time last year, and 58 per cent of businesses are operating with reduced revenues – often less than half of pre-COVID levels.

In addition to revealing a reduction in footfall and revenues, the in-depth look at main street blocks across the country also shows that businesses in downtown and downtown-adjacent areas – where many are struggling with issues related to the worsening housing and addiction crises – are struggling to draw local shoppers back to the area. While most blocks saw month-over-month gains in visitors, Vancouver’s Strathcona neighbourhood, for example, which borders the Downtown Eastside, saw footfall down 42 per cent in April, and declining further year-over-year in September, by 48 per cent. Business owners reported that vandalism, street activity and crime were on the rise, and while they recognize the social issues are complex, they worry this is pushing local shoppers to take their business elsewhere.

Over 60 per cent 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.

“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.

Key findings of the research study include:

• Visits to the seven blocks were down between 30-70% compared to pre-COVID levels. Downtown Victoria in B.C. 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 in North Shore Kamloops, a small community in B.C., 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% and 67% of businesses respectively, said their biggest challenge is increased safety issues in the neighbourhood.
• More than 25% 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%). It was more popular than creating a more competitive tax environment (40%) or better access to financing (20%) as the most important thing governments and other main street advocates should do to support them going forward.
• 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.