Retail commerce is in trouble, we have known that for some time: small stores especially, have difficulty competing with big ones. Empty storefronts in Montreal a growing concern, even big stores are now facing problems. Those of some age may still remember that what is now the Banque Scotia Cinema used to be Simpson’s, a department store, and that one block east Eaton’s was another place to buy clothes, domestic appliances, and even have a nice afternoon tea. Of course, technology in the form of online shopping has played an important role in the disappearance of many stores. According to a City of Montreal‘s press release, the vacancy rate in the most important commercial streets fluctuates between 10 to 15 per cent.
Montreal property taxes have an impact on empty storefronts
However, the factors that have contributed to the decline of the traditional shop are multiple. A recent report by Global News quoted Simon Gaudreault, senior director of national research for the Canadian Federation of Independent Business, who mentioned high property taxes and roadwork on commercial streets as factors that have resulted in the current critical time for retail business. “Property taxes are quite high in Montreal so that can have an impact when you have leases,” he said. “When it’s translated into the rent, it can scare off some small businesses” Gaudreault is quoted as saying.
City of Montreal holds public consultations on empty storefronts
The gravity of the situation has finally caught the attention of the City of Montreal and Mayor Valerie Plante, who this Monday announced the call for public consultations on the issue. “Commercial arteries play a fundamental role in the vitality of neighbourhoods and in the economic development of the metropolis” said Ms. Plante, adding that “they are at the centre of our administration’s concerns” and, therefore, the city must face the problem of the high rate of empty stores in many of our principal streets. Among others, she mentioned St-Laurent Boulevard, Ste-Catherine Street and St-Denis Street. Indeed the areas where the problem has reached a higher dimension and, in the case of Ste. Catherine, it may still get worse once the overhaul of the water pipes underneath the street extends to its most popular commercial sector, west of McGill College Ave.
Montreal Mayor wants to lower commercial property taxes
The consultations on the commercial vacancy that will be launched by the city’s Economic Development Commission will consist of three stages: 1. September to December 2019, diagnostics of the current situation and analysis of the best practices to deal with the problem, 2. December 2019, presentation of documents for the consultations, 3. January 2020, holding of public consultations.
Besides this consultation process that should give the opportunity to both, the merchants, who are the main interested party in this situation, but also the general public, Mayor Plante also anticipated some possible moves on the part of the city: “I’m thinking about lowering the taxes like we did during the last budget, which is something that was asked for a very long time, so we decided, okay we hear you,” said the Mayor.
In the past, the city had already announced palliative measures for those stores affected by the major works taking place on Ste. Catherine Street, something similar (although insufficient, claimed many store owners in the area) was done on St. Laurent Boulevard a few years ago. This program amounts to a total of 25 million and will run until 2021.
Although some would say that the city’s response to this problem is coming somehow late, it is better than nothing. As stated by the different stakeholders, the crisis of retail commerce requires some action on the part of the city, especially on the tax front. However, some regulations regarding commercial rentals and the speculation on the part of real estate corporations are necessary, something that may require the intervention of other levels of government too.