Pia Bouman’s monthly revenue as a longtime ballet teacher in Toronto’s west end has not changed very much in the past few weeks even though the local economy is progressively moving into the deeper stages of reopening.
Physical distancing rules means that in-person attendance at her non-profit Pia Bouman School of Ballet and Creative Movement has to be limited to a maximum of three or four students per class, a third of the class size she used to have in pre-pandemic times.
After each class, a thorough cleaning and sanitizing process begins. Despite the precautions, demand for in-person classes has remained low, with just five classes per week.
“The landlord has not given us leave yet,” said Bouman, who has not paid rent since her revenue dried up in late March. “But if we lose this school because of rent arrears, the ramifications would be huge for this community: there are hardly any dance spaces in the west end of Toronto.”
Bouman’s dance school is one of many small businesses that are continuing to struggle despite nationwide rules that now allow for most indoor activities to resume and for gathering in relatively large groups (albeit at a distance).
The problems vary according to business
and are complex in nature, but include potential landlord troubles, customer comfort levels and a looming Canadian winter that will shut down patio sales.
Bouman’s landlord, for example, has not yet chosen to apply to the Canada Emergency Commercial Rent Assistance (CECRA) program, the federal subsidy for landlords, meaning she could be served an eviction notice at any point.
On top of that, adhering to physical distancing rules means that she can’t take in as many students at a time, even if they didn’t still have trepidation about sweating it out in an indoor space.
At the height of the pandemic in early April, just 21 per cent of small businesses were open, according to data from the Canadian Federation of Independent Businesses. That number has tripled as of Aug. 5, but approximately 75 per cent of small businesses also report that they are making less revenue than they would have at this time of the year, and 26 per cent said they are making less than half what they used to.
“There are people out and about, in parks, walking, biking, cycling, but not many are actually coming in and purchasing things, especially if it requires being in an indoor space for a long time,” said a sales manager at a downtown Toronto branch of clothing store Zara Inc. “Usually, we’d be packed for end-of-summer sales.”
A few units away from Bouman, the owner of Mosaic Yoga, Morgan Cowie, is facing a similar problem: her yoga studio is open for classes, but business has been bad.
“Revenue is dismal right now. I am working solo, seven days a week, and I’m just trying to somehow keep things ticking along, but it’s really grim right now,” Cowie said.
Things are not much different since the Financial Post
talked to Cowie
back in March. Mosaic Yoga, at that point, had just refunded most of its membership fees, and introduced Zoom classes.
“One of the problems for us is that people are just not comfortable wearing masks or shields indoors yet, and I think that behavioural modification is hard for people,” she said. “I’m also worried as to what will happen when CERB (Canada Emergency Response Benefit) runs out, but, look, August has always been a slow month so maybe September will be better as people get back to the routine of school.”
Many of the federal government’s income support measures have provided a lifeline for small businesses to this point, but there’s a degree of trepidation among some owners as to what will happen when the programs are modified, or stopped altogether.
For example, Cowie has been personally surviving on CERB. Her business was not eligible for the government’s wage subsidy program so she had to let all her staff go and does not plan to hire most of them back until business picks up.
Almost 40 per cent of business owners with up to four employees have used CERB, according to CFIB data, and that program is scheduled to end
on Oct. 3.
The self-employed who have been paying into employment insurance will be able to access some benefits, but the payout rate will depend on their employment history and the extent of their contributions.
In Edmonton, Justine Barber, the owner of Poppy Barley, a clothes, shoes and accessories store, said she is extremely concerned about the end of government benefits.
“We have really been supported by the government, especially by the wage subsidy,” she said. “The revised wage subsidy, which will go on until the end of the year, will give us much less than what we’re getting now.”
The federal government’s modified wage subsidy program is designed to give out a smaller subsidy to companies whose revenues are improving. Those that need the help most, however, could get a wage subsidy as high as 85 per cent, up from the 75 per cent that can be currently claimed.
. July 2020 revenue, according to Barber, was 90 per cent of that in July 2019, but its in-store sales at two mall locations in Edmonton and Calgary are 50 per cent of what they normally are.
“It’ll be a down year overall, we’re projecting about 80 per cent of revenue compared to last year,” she said.
Margins are so thin for independent retailers such as Poppy Barley that even the slightest increase in costs can push them into uncertain territory.
“We’re still waiting on our landlord to receive CECRA, we are really banking on that,” Barber said.
Both the retail and food sectors have somewhat recovered since provincial economies began reopening. The latest employment data from Statistics Canada showed that food service jobs rose by 100,500 in July, although that number was still 300,000 fewer than what it was in February.
But the recovery could be short-lived since many restaurants are relying on patio sales.
Charles Khabouth, chief executive of Ink Entertainment, one of the country’s largest restaurant and bar owners, said 90 per cent of his company’s current revenue is coming from outdoor dining.
in Toronto and Montreal, leaving only one coffee shop open for takeout. But he said business has been roaring since patios were allowed to open in late June.
“Traffic outdoors has been overwhelming, sales are skyrocketing, people are so happy to be out,” he said. “We have under 100 cases a day in Ontario, you’d be a very unlucky person to catch this virus.”
Cabana Pool Bar, Ink’s flagship day club in downtown Toronto, has now been converted into a restaurant — one that Khabouth said is seating about 1,000 people per day.
His plan is to scoop up as much revenue as possible in the summer months, while continuing to rely on the government’s wage subsidy program to offset costs for as long as the program continues.
Meanwhile, Khabouth is hopeful that infection rates will stay low as more people get used to wearing masks.
“Look, I see this (outdoor dining) as a runway for people getting comfortable being around other people,” he said. “We certainly won’t be able to do the volume that we can by having people on a patio, but I’m hopeful that once it gets cold, people will still remain comfortable coming to restaurants and bars.”
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
