A number of downtown business improvement associations across Canada are calling for another extension to the small-business loan given during the height of the COVID-19 pandemic to address the growing storefront vacancy rates.
In 2019, Victoria’s storefront retail vacancy rate was at 4.1 per cent, according to a report by the Downtown Victoria Business Association. Now, that same rate sits at roughly 12 per cent.
And Victoria is faring better than many of the other cities highlighted by the International Downtown Association Canada. Edmonton has the highest rate at 33 per cent, followed by Winnipeg just above 30 per cent, Toronto at 14 per cent, and Halifax at 13 per cent. Only Montreal at 11 per cent had a lower rate than Victoria.
At the end of 2022, Colliers Canada pointed to the redevelopment of Victoria as a cause for the higher vacancy rates.
“Downtown street front vacancy increased to 10.2% in 2022, due in part to the addition of new supply. 1.1% of this vacancy is slated for redevelopment,” Collier’s 2022 Q4 report says.
IDA Canada also points to the pandemic, rising costs, labour shortages and operational barriers including anti-social behaviours that have negatively impacted downtown businesses.
“We’re really looking for the provincial government to take leadership on those issues to stop the repeat offenders to look at tougher treatment for people including involuntary care to really make downtown commercial business districts feel safer for the employees and the public,” said Jeff Bray, CEO of the Downtown Victoria Business Association.
The group is calling for another extension to the Canada Emergency Business Account (CEBA) loan repayment timeline, which were loans of up to $60,000 for small businesses and non-profits during the COVID-19 pandemic. The loan was first announced in March 2020, then closed on June 30, 2021.
Businesses that repay the loan on or before Jan. 18, 2024 will receive loan forgiveness of up to 33 per cent, or $20,000.
It’s something B.C. Premier David Eby has signed onto, joining Premer’s from across Canada in asking Prime Minister Justin Trudeau for the federal government to extend loan repayments for struggling small businesses.
The federal government says 898,271 businesses were approved for CEBA loans, and 571,851 were approved for expansion loans of an additional $20,000. In B.C., 122,890 were approved for CEBA loans and expansions.
“While government efforts have certainly aided struggling businesses, the brief 18-day extension for federal payments falls short of what’s needed,” said Kate Fenske, chair of IDA Canada.
“Many businesses are teetering on the edge. The very core of our downtowns and main streets—our central business districts—are feeling the strain. The moment calls for collaborative and holistic strategies.”
The group also is calling on the federal government to direct funding through the Regional Economic Development Agencies.
“This isn’t solely about lengthening loan repayments, vital as that is. We’re looking at addressing systemic issues impacting every riding from coast to coast,” Fenske said. “Downtowns and main streets are the economic lifeblood of our communities, and relief, restructuring, and visionary leaders are needed to ensure their prosperity.”