Rural Ontario lost 3,000 businesses in the first 10 months of 2020 as the COVID-19 pandemic clobbered the economy, new data shows.
A report by the Rural Ontario Institute found the number of active businesses in the province’s small towns and rural areas dropped seven per cent from January to October of last year.
“That drop off might be more permanent because we’re not seeing reopenings that are significantly higher than what the norm has been, so that’s a concern,” said Norman Ragetlie, the institute’s executive director.
But some businesses managed a comeback in the middle of 2020.
At the pandemic’s onset, from January to May of last year, the number of active rural businesses dropped 15 per cent, representing about 7,000 business closures.
When restrictions lifted in the summer months, more businesses reopened, with closings evening out to the seven per cent figure by October.
“Many were temporary closures,” Ragetlie said. “The mere fact that somebody is inactive in a month isn’t necessarily a death knell.”
The Rural Ontario Institute is a Guelph-based think tank that advocates for rural areas in the province.
The latest report pulls data from Statistics Canada that looks at payroll information. Any business that had at least one employee on a payroll, then had none, is considered a closing in the data.
It doesn’t mean the closings are permanent.
The data for October – the latest available – comes before any effects of the second Ontario-wide lockdown that began in December and is only now starting to lift.
The hardest-hit industry was arts, entertainment and recreation, with active businesses down 15 per cent. Accommodation and food services dropped by 12 per cent.
Business closings could be more profoundly felt in small towns, where they support local sports teams and employ residents, and where there are fewer other business options to begin with, Ragetlie said.
“The question really is, have people been moving … their consumer patterns in such a way so that it is no longer local,” he said. “Have we moved more of the retail trade into big-box type venues and away from the mom-and-pop hardware store that might still be the only one in town?”
Stephen Thompson, chief executive of the Sarnia-Lambton Economic Partnership, said his region has seen a mixed bag of business boom and bust.
Some businesses in lakeside communities, such as Grand Bend, reported a banner year in 2020, as lockdown weary folk flocked to area beaches.
But those in theatre-driven communities, such as Petrolia and Forest, felt the toll of darkened stages.
Thompson said businesses in the region’s smaller communities have faced different challenges during the pandemic than those in urban centres.
“Many smaller communities have an increased reliance on small independent businesses, and quite often those have been around sometimes for generations and have built their business on customer service,” he said. “Providing customer service in an environment of not being able to welcome large numbers of people into an enclosed store certainly is different.”
Another challenge for small shops has been the shift to e-commerce.
“Small independent businesses quite often don’t have the online platforms, and sometimes really don’t know where to start,” Thompson said.
The economic partnership has focused on initiatives such as the digital main street program to help boost businesses' online presence, which he said will be key even as more parts of the economy reopen in the coming months.
“Our best guidance is for businesses to continue thinking about how they can implement ways to do business using innovation to try to diversify."
firstname.lastname@example.orgThe Local Journalism Initiative is funded by the Government of Canada.
Max Martin, Local Journalism Initiative Reporter, London Free Press