At 11 a.m. on a Wednesday, the office crowd is just starting to trickle in to Eat Trattoria, a lunch spot located in the heart of Calgary’s Plus 15 skyway network.
It’s a far cry from a few years ago, when the downtown café would already be full with workers trying to beat the lunch rush.
“We still do a good lunch hour, but it really is a lunch hour that’s now 45 minutes rather than one that was about an hour and a half,” said Matthew Batey, chief operating officer of the Teatro Restaurant Group, which owns Eat Trattoria and other downtown restaurants.
Businesses in downtown Calgary are still making do with a relatively thin crowd these days, as the pandemic-era trend of working from home compounds a downtown exodus that first began during the 2014 oil price crash.
They’re not the only ones.
Matthew Batey of the Teatro Restaurant Group, which owns Eat Trattoria and other downtown Calgary restaurants. The business is among those in urban centres across the country contending with fewer customers as people continue the pandemic-era trend of working from home. (Paula Duhatschek/CBC)
Calgary’s downtown offices are the emptiest in the country, but most urban centres are still struggling to varying degrees to get back to where they were before the COVID-19 pandemic arrived in early 2020.
According to commercial real estate firm CBRE, the national downtown office vacancy rate is hovering at 18.9 per cent — the highest in about the last 10 years — with some of the highest vacancy rates in Edmonton, London, Ont., and the Waterloo Region in Ontario.
Without a daily crush of office workers providing a reliable customer base, downtown businesses and restaurants across Canada say they’re having a hard time making ends meet.
In search of federal support, business leaders and advocates were on Parliament Hill in Ottawa this week asking for an extension on COVID-era business loans, along with dollars to fix decaying downtown infrastructure.
Kate Fenske, chair of the International Downtown Association Canada and CEO of Downtown Winnipeg Biz, was in Ottawa this week asking for federal support to help still-struggling downtowns. (Jeff Stapleton/CBC)
“Many of our downtowns across Canada have crumbling sidewalks or trees missing, and so there’s a real opportunity for some simple things, but also some bigger visionary projects … that are going to make sure our downtowns are strong for generations to come,” said Kate Fenske, chair of the International Downtown Association Canada.
But injecting new life into Canadian downtowns isn’t just about patching holes that have emerged post-pandemic, Fenske said. Instead, she said, a conversation is underway at a national level about how to build downtowns that make sense for the way we live now.
“Workers absolutely play a key part in the downtown community, but we can’t rely on workers alone,” said Fenske, who is also CEO of Downtown Winnipeg Biz.
“What is that new vision for downtown? It’s about people that are here beyond the nine-to-five.”
Safety concerns a barrier
In Fenske’s home city of Winnipeg, the downtown’s post-COVID recovery has been hampered in part by concerns about safety.
During the pandemic, issues of homelessness and addiction both worsened and became more visible without the city’s typical buzz of activity. Absent a regular crowd providing a sense of safety in numbers, many people have stayed away from the core altogether, which has exacerbated the situation.
Sarah Baxter and Connor Novak work with the Downtown Community Safety Partnership, a Winnipeg service that patrols the streets 24/7 offering help to vulnerable people and safe walks home. (Karen Pauls/CBC)
One partial solution has come in the form of the city’s Downtown Community Safety Partnership.
Launched during the pandemic, the service patrols downtown Winnipeg 24/7, responding to distress calls, providing wellness checks and helping people sleeping rough to access food, shelter and other help, like addiction services. It also provides escorts for Winnipeggers who are worried for their personal safety.
Greg Burnett, the group’s executive director, said safety is a two-way street. While issues such as homelessness and mental illness can make the public feel unsafe, he said it’s often the people experiencing those problems who are most at risk.
His group aims to help people on both sides of that equation, whether it’s a person in distress or a downtown worker who wants a safe walk home.
Greg Burnett, executive director of the Downtown Community Safety Partnership in Winnipeg, says his group endeavours to help people who are homeless or face mental health issues, as well as members of the public who might feel unsafe walking alone. (Karen Pauls/CBC)
“Our main reason to exist is to encourage everybody downtown that they’re in a safe and healthy environment,” Burnett said.
Fenske said the problem isn’t unique to Winnipeg, as cities across Canada face safety “perception” problems on their road to recovery. To get at the root of the issue, she said, all levels of government need to fund and find solutions for the intertwined problems of mental illness, addiction and homelessness.
Push for Winnipeg development
To bring back that safety-in-numbers feeling, though, work is also underway in Winnipeg to encourage people to return downtown for reasons that go beyond a nine-to-five desk job.
Mark Chipman, executive chair of True North Sports and Entertainment, which owns the NHL’s Winnipeg Jets, has described the city’s downtown as being in a “humanitarian crisis.”
An artist’s conception of a 15-storey medical office tower that’s part of a proposed redevelopment of Winnipeg’s Portage Place mall. The proposal, made by True North Real Estate Development, also includes apartments. (Arhitecture49/True North Real Estate Development)
True North has also put forward a $550-million proposal to renovate the Portage Place mall across from the Canada Life Centre arena, where the Jets play, and build a medical office tower and more apartments.
The proposal dovetails with another project by the province’s Southern Chiefs’ Organization, which is behind a $130-million transformation of the former downtown Hudson’s Bay building into a mixed-use project called Wehwehneh Bahgahkinahgohn.
“It’ll be a place that people love to be. A place for Indigenous peoples. It’s their home, and it’s a place they can feel welcome,” Grand Chief Jerry Daniels of the Southern Chiefs’ Organization said during a tour of the former Bay building earlier this year.
Empty offices, closed shops plague some Canadian cities
Featured VideoSome Canadian city centres are struggling post-pandemic with empty offices and low foot traffic, forcing businesses to close. Advocates and business leaders are asking Ottawa for help as they try creative solutions to save their downtowns.
Embracing the new in Calgary
Perhaps no city has embraced the idea of building back differently quite like Calgary. The city got a head start on the downtown vacancy problem when oil prices crashed in 2014, leading to business closures, consolidations and layoffs.
When it became clear that the number of office towers sitting empty was taking a big hit out of the local tax base, the city devised a sweeping billion-dollar plan to revitalize the core.
The most headline-grabbing element so far has been a push to convert empty offices into homes, hotels and university spaces. At a news conference this week, the city announced the latest developments to get a green light: two residential projects and one hotel.
In all, the city now has 17 projects in the pipeline — including 13 active projects and four under review — that are expected to create 2,300 new homes and cull more than two million square feet of vacant office space.
This 10-storey office tower in Calgary is being converted into a residential building with 112 units. The city now has 17 projects in the pipeline — including 13 active projects and four under review — that are expected to create 2,300 new homes and cull more than two million square feet of vacant office space. (James Young/CBC)
“There’s a reason Calgary is the talk of the town, and it’s because of statistics like this,” Mayor Jyoti Gondek said at a news conference this week.
While Calgary built a downtown that worked well at a specific point in time, Gondek said, that time no longer exists.
“The more mixed-use we do downtown, the better able we are to combine housing with employment hubs, with recreation and all of the other many, many things people do in their daily routine, the stronger our downtown will become.”
The office conversion program is being watched closely by cities throughout North America, and some cities like Ottawa have embarked on a similar push.
“People are watching us from around North America, you know, from New York state to New Orleans to Los Angeles, who are just going into this work-from-home, high-vacancy phenomena,” said Greg Kwong, regional managing director in Alberta for CBRE. “Hopefully we can be a shining star [and] provide some key performance metrics that are beneficial to other cities.”
Still, the firm noted in its latest office vacancy report that the number of feasible office conversion projects is limited and that conversions alone can’t be a silver bullet.
Greg Kwong, regional managing director in Alberta for commercial real estate firm CBRE, is shown in his Calgary office. ‘Hopefully we can be a shining star [and] provide some key performance metrics that are beneficial to other cities,’ he says. (Paula Duhatschek/CBC)
While Canada’s downtowns share many challenges, each one is different and will have to find its own way forward. How that happens — and how quickly — remains to be seen.
“I’ve been in the commercial real estate sector for 38 years now, and all I do know is one thing: The only constant is change,” Kwong said.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
