The City of Ottawa should consider implementing some strong measures to help area businesses crippled by the ongoing transit strike, says a local business analyst.
Ian Lee, director of the MBA program at Carleton University’s Sprott School of Business, estimates it could take businesses a significant period of time to recover from the strike, and many could collapse under the increasing pressure.
“Maybe if we adopted some kind of legislation to give a tax rebate to businesses that were disrupted due to strikes, it would help prevent that,” he said.
The strike, which has gripped the city for almost seven weeks, has reduced major shopping areas to ghost towns, and merchants have begun eyeing their books with increasing concern. Small businesses that rely heavily on steady sales are particularly vulnerable, says Lee.
“They don’t have deep pockets like large, well-financed companies,” he explained. “They tend to live life close to the bone. Any disruption imposes huge risks.”
Capital Ward Coun. Clive Doucet estimates the strike is costing Ottawa businesses a total of about $8 million a day. The city also lost 4,100 retail jobs in December alone.
According to Lee, figures might seem staggering, but they are quite plausible.
“It does sound credible,” he said. “I can’t validate it empirically because I don’t have the data, but I do not think it is far-fetched at all…the impact on the business community is very substantial.”
Economic analysts have pointed out that businesses in Centretown are being disproportionately affected. Even shoppers with access to a vehicle are steering clear of the heavily-congested downtown core and surrounding neighbourhoods.
Many of these businesses were already coping with substantial losses as a result of construction in their areas.
Portions of Bank and Preston streets were closed off to traffic for months last year, leaving some owners teetering on the edge of bankruptcy even before the transit strike dealt a double-whammy to their bottom lines.
Preston Street Hardware is one store feeling the pinch. According to manager Fred Giannetti, there has been a noticeable drop in foot traffic on the street since the buses stopped running.
“I’d say business is down by 20 per cent or more,” he says. “A lot of people are angry. And when people are angry they don’t want to shop. They just want to get home.”
Giannetti says he has spoken to other merchants in the area, and they have not fared much better.
“We’re all feeling the same way. It’s very frustrating.”
Even businesses that would intuitively be making more money during the strike, such as parking garages, are hoping for a quick resolution to the dispute.
“(Business) is not up dramatically,” says Robert Shahrasebi, a manager at Capital Parking Inc., which oversees 3,000 spaces across Ottawa. “At this time of year, we’re always full anyway.”
The company’s lots are completely filled during weekdays, explains Shahrasebi, but traffic is way down during evenings and weekends, cutting into any gains made during working hours.
The absence of public transit has also made it extremely difficult for many employees to get to work, forcing managers to scramble to provide them with rides or simply make do without them.
“For us the biggest problem has been staff,” says Aleesha Mullen, who works at the Tommy and Lefebvre sporting goods store on Bank Street. “Over the Christmas season, we can use anybody we can get, and some people couldn’t come in because they live out of town.”
Lee says a financial penalty, such as the cost of a tax rebate for small business owners, might put pressure on the city to work things out quickly with the striking transit workers. Right now, the strike is actually saving the city about $3 million a week.
“I haven’t heard of anything like that as of yet,” he says. “But these businesses are important. They create jobs. They are doing a public service.”