KWIECINSKI: Toronto small businesses need construction relief now

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Toronto has witnessed the havoc that lengthy construction projects wreak on small businesses. The Eglinton Crosstown Light Rail Transit (LRT) project has been under construction since the summer of 2011 with no end in sight.

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Toronto’s small business community is fed up with the project’s frequent delays, constantly shifting timelines, ballooning costs, and now a legal challenge that could halt construction. Enough is enough.

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Losing foot traffic along with Eglinton has led to lower sales and has forced many small businesses to close. Some of these businesses say that the construction was more damaging than Toronto’s lengthy government-mandated lockdowns during the pandemic.

The Eglinton LRT puts a new meaning into the saying, “No pain, no gain.” Small businesses are willing to put up with some frustration to reap the rewards of improved transportation. The problem is that they must somehow manage to survive until the project gets to the finish line. The glossy project images never show the mess businesses are forced to go through to get there.

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Toronto needs a comprehensive construction mitigation policy now. (The city’s Transit Expansion Construction Mitigation Grant Program is better than nothing, but it doesn’t provide direct compensation to small businesses.) CFIB has been fighting for one since 2018 when we released our Paving a Smoother Road: Helping Small Businesses Survive Infrastructure Work report. We’ve been calling for measures like fair financial compensation that is quick, direct and easy to access, a penalty system for completing projects late, and a designated business liaison officer to regularly canvass and update the local business community on a project’s progress.

Some cities have already taken us up on the idea.

Montreal operates a construction mitigation program with direct financial compensation to individual small businesses. They recently announced that in addition to the up to $40,000 per year based on income losses already provided, the city will also offer a $5,000 grant to businesses with construction disruptions lasting six months or longer. This money will be available from the start of a project without any lost income strings attached.

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All candidates in Toronto’s mayoral race should promise to adopt a similar policy, at minimum for future construction projects.

Toronto shouldn’t always have to shoulder the burden alone. In the case of the Eglinton LRT – a project funded by the Ontario government through Metrolinx – the Ontario government should pony up financial relief for impacted small businesses. Any level of government that provides funding to build a project should contribute to compensating small businesses.

The Ontario government should have integrated a penalty system into the contract with the winning bidder of the Eglinton LRT. In this way, penalties for project delays could have been used by the government to cover small business construction relief costs. It’s something the province should consider for future projects, including ones for the Ontario Line.

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The recent closure of Queen Street between Bay and Victoria for an estimated four-and-a-half years is sure to cause even more mayhem. Even if you don’t have a business located on the actual stretch of road that is now closed, traffic congestion will increase, and people will just stay away from the entire downtown core.

This is bad news for businesses already feeling post-COVID realities like hybrid work and new customer shopping behaviors that have turned the downtown core into a ghost town.

What makes matters worse is that if the Queen Street shutdown goes beyond the current estimated duration, Toronto will further develop a reputation of becoming a living construction zone. This moniker will be hard to shake and could impact future investment.

It’s time for Toronto to adopt a construction mitigation policy with direct compensation for affected small businesses.

— Julie Kwiecinski is the Director of Provincial Affairs (Ontario) for the Canadian Federation of Independent Business