How ‘Stage 2’ closures are affecting local establishments
It’s no surprise that local businesses have been one of the most impacted victims of the COVID-19 pandemic. With millions of dollars lost in revenue and tens of thousands unemployed, both the local and national economies have taken a turn for the worse.
With the sudden 28-day closure of specific operations by the provincial government, local businesses have found themselves at a standstill once again. Supplies have been delivered and new staff has been hired, and although the federal government recently announced rent relief for these smaller businesses, they are still struggling.
The Ottawa Coalition of Business Improvement Areas (OCBIA) believes that the 28-day closure could threaten dozens of businesses, expecting loss in revenues of 20 to 30 per cent for some businesses.
As the semester progresses, the on-campus student presence has dwindled significantly, leaving many on and off-campus residences empty. With the low student traffic and the shift to remote work, how are businesses in the previously student-populated downtown core progressing?
Decreased student presence means decreased profit
Prior to the start of the fall semester, the University of Ottawa announced that all of its courses would be held online, with few in-person exceptions. Several residences were closed, the ones that are open house only a limited capacity of students.
With the University projecting for an estimated loss of approximately $65.5 million at the beginning of the summer, administrators have prepared for the worst. Local businesses, however, have not.
“I lost maybe 85 per cent of sales, so you have to live with 15 per cent,” said Magdi Bazara, the owner of ‘3cents2’, a coffee and pan-bread shop. They had recently opened a secondary location on Templeton Street, but had to close it a couple of months later as a result of the COVID-19 pandemic.
With government aid and his landlord forgiving part of his rent, Bazara is still struggling to work with only 16 to 20 per cent of customers that he previously had. He was forced to lay off all of his staff to make ends meet.
Previously in May, the Canadian Imperial Bank of Commerce (CIBC) released a poll that said 81 per cent of small businesses believe that COVID negatively affected their operations, with 32 per cent worrying about the survival of their business over the next year.
CampusTec, a technology repair service located inside the University Centre, has been making the necessary adjustments to continue business operations safely, despite challenges from the University, including an initial refusal to decrease rent.
“Because we’re located at the University Centre, this is prime real estate and they bill fairly high for monthly lease,” said Michael Xiang, the manager and technician of Campus Tec.
“They’ve eventually changed their stance to apply for a rent subsidy. But despite that, they still want to bill us down the line for any business revenues on their side.”
Back to the drawing board
Despite the significant decrease in student presence, many restaurants and businesses both on campus and in Sandy Hill have continued to safely operate by finding various ways to adapt.
With the Ford government’s recent prohibition of all indoor food and drink service, smaller establishments find themselves stuck in the same position they were at the beginning of the pandemic. The recent announcement from the U of O regarding plans of holding the winter semester online provides additional pressure.
Xiang said that because his business couldn’t sustainably support itself on campus, they have shifted to an appointment-based approach which will possibly continue through the winter, as well as potential online sales.
“The return of students is up a little bit, but definitely way less than expected. We’re only getting about 15 per cent of our annual expected revenue for September. We’re projecting the same thing for the rest of the year.”
Bazara, on the other hand, claims that little revenue has been generated with the minuscule student presence.
“When I reopened back in June and July and half of August, the sales were close to zero, almost nothing. [Since] mid-August [up] until now, these sales [have] helped me reach [my] minimum rent payments.”
With the additional financial pressure, work has bled into personal time as well. Many business owners spend long days and nights, preparing their supplies and calculating budgets.
Rigo, the co-owner of the restaurant Ahora, located in the Byward Market, explains how COVID-19 has affected him morally and emotionally. With little staff, he is forced to juggle more responsibilities.
“At this point, I have to work more because I have to be in-person. I have to be at the restaurant to take care of everything, like orders online and [delivery] companies like Skip the Dishes.”
Unfortunately, the future isn’t very clear, especially in these circumstances. By the time the extended 28-day lockdown is lifted, it will be early November and edging towards another Canadian winter; final exams and projects will also be creeping up on students, possibly hindering any students’ plans to go out.
“We’re gonna start online orders, and work in conjunction with companies who provide delivery services,” said Rigo. Although these delivery couriers take a large portion of his profits, he believes that business is worse without them and he wants to keep his customers in mind.
Bazara hopes that as long as his landlords and the federal government support him, he won’t have to consider the idea of closing. But other Sandy Hill businesses cannot say the same.
“Nobody knows if owners [within] Sandy Hill will be able to continue business or not. Many of them said they will not be able to do anything,” he said.
In addition to the OCBIA’s predictions, a collective of approximately 6,200 Ottawa businesses have also written an open letter to the provincial government, demanding data that justifies these closures.
However, optimism, drive and appreciation for work are what keeps these businesses looking forward.
Bazara prides himself on the atmosphere 3cents2 has cultivated, describing the experience as very cozy and multicultural and a sensible alternative to more expensive restaurants and hangouts.
Rigo is also very grateful for the support his restaurant has received, despite the difficult circumstances and financial tensions.
“I have to thank every single customer for their loyalty and generosity. As a small, independent business we only survive with the support of our community.”