Downtown city centres in Canada have been hit hardest by the COVID-19 pandemic. Many elements that contribute to the vigour and appeal of downtown to visitors and residents, such as tourism, business travel, events, restaurants and hotels, have been affected while we navigate large-scale vaccine rollout. And as people avoid crowds and follow social distancing measures, the very essence of downtown city centres has become incompatible with imposed restrictions. The result has been a loss of workers, tourists and students, meaning fewer customers for local merchants.
Over the long term, downtown city centres will continue to be transformed by the acceleration of trends that were emerging before the pandemic, including the adoption of remote working, video conferencing, distance learning, an uptick in e-commerce and urban sprawl. Though we’ve adapted to life during the pandemic, if no action is taken to preserve the vitality of Canadian downtown city centres, there is a risk that a cycle of urban decay could begin, with grim economic results. The loss of activity has contributed to an overall decline in the attractiveness of downtown, strengthening devitalization.
In this report, we take a look at the impact of COVID-19 on six downtown city centres across Canada: Toronto, Montréal, Vancouver, Calgary, Edmonton and Ottawa.
The massive shift to remote work will continue beyond the pandemic, as most of the downtown office towers are occupied by companies in sectors with a high capacity to make the shift to remote work. According to our Impact of the pandemic on the downtown areas of Canada’s six major cities report, higher adoption of remote work also means an estimated 10% to 20% fewer people commuting to downtown city centres each day, creating economic consequences for various sectors and a lessened demand for office space.
In the first week of April 2020, hotel occupancy was less than 20% across Canada, according to Statista. In addition to low occupancy rates, downtown city centres are contending with public health and travel restrictions, and the closure of stores, restaurants and businesses reliant on tourism. While leisure tourism is partially protected by local tourism and expected to eventually fully recover, the decline in business travel will persist.
Before COVID-19, downtown businesses were already weakened by the rise of e-commerce. Since the pandemic, the growth of online shopping has only increased. Online sales reached CA$39.3 billion in May 2020, an increase of 99.3% from February 2020, according to StatsCan. The rise of e-commerce and its attractiveness to consumers, as well as competition with suburbs and their large, diverse and more accessible shopping centres, has impacted the strength of the downtown commercial hub—a trend likely to increase in the years ahead.
Montréal, Toronto and Vancouver are particularly at risk because they are the downtown city centres with the greatest decline in visitor traffic because of the shift to remote work, their dependence on tourism and the size of their student population.
Commercial businesses in downtown Ottawa are concentrated around the Rideau Centre and the ByWard Market, walking distance from office towers. The absence of public and private sector workers, tourists and students has had a severe impact on retail, food service and other businesses in this area. It’s uncertain at what level they will return to the city centre.
Downtown Edmonton can rely on the resilience of the public sector to mitigate the migration of workers away from the downtown core. In addition, relatively high and stable wages may fuel strong consumption.
Several organizations, including concert halls, museums and movie theatres, have had to close temporarily, while festivals and events have been cancelled. The pandemic is accelerating transformation in consumption patterns that were already happening before the pandemic, with online platforms proving to be more resilient since the beginning of the crisis.
These cities will increasingly face challenges in the coming years, which will become more complex over time. To address these challenges they will need to implement preventative strategies, that may include::