Nearly 4,000 businesses closed in Toronto last year, but it’s not all bad news

With the imminent threat of lockdowns no longer looming, Toronto’s economy is slowly but surely beginning to recover.

Restaurants can welcome indoor dinners again, capacity limits in gyms are gone, and masks are no longer required in clothing stores (where, frankly, it has been difficult to experiment with wearing sunglasses for the past couple of years).

The Bank of Canada reports that despite ongoing supply chain issues and labor restrictions, most local businesses expect to see a significant increase in sales through 2022. A quick glance at the bustling streets of Toronto on any warm day this spring says the same thing.

However, while the economy appears to be recovering as we move into 2022, thousands of local businesses simply haven’t made it to that point.

A report due to be presented to the City Hall Planning and Housing Commission next Tuesday revealed that Toronto saw a net decline of 3,090 businesses between 2020 and 2021. With 82 new businesses added in the same year, that means nearly 3,910 businesses closed in total. .

The number of new businesses in Toronto was steadily rising for years before the pandemic hit. Image via Toronto City Planning.

“In 2021, the Toronto Employment Survey recorded 1,451,520 jobs citywide, an increase of 1,610 jobs or 0.1% from 2020,” reads a report kicking off the city’s annual employment survey, released May 13.

“The Toronto economy experienced a limited recovery in 2021, after record job losses for 2020 due to the emergence of the COVID19 pandemic. In 2021, increases in employment were observed in the enterprise (0.9%) and office (0.7%) categories, while manufacturing as well as service employment declined at the highest rates. Both are at 1.7%.”

The total number of commercial establishments during the past year reached 69,990, which represents a net decrease of 4.2 percent.

Those numbers don’t look great, especially when combined with data from the previous year. In contrast to the same data, however, we’re seeing some slight signs of improvement – which is noticeable, given how much was spent from 2021 with severe restrictions in place across Ontario.

The 2020 edition of the Toronto Employment Survey reported a net decline of 4.5 percent in business during 2019 with 3,480 establishments closing and only 800 openings.

So, while the survey counted more overall businesses (73,080) in 2020 than it did in 2021 (69,990), the rate of decline improved slightly between these years, both due to fewer businesses closing. Companies and open more business.

Before the pandemic, the survey had recorded no significant net declines since 1993 — only new establishments (of which there were 3,810 in 2019).

“In 2020, the survey counted 73,080 business establishments in the city, a net decrease of 3,480 establishments or 4.5% from 2019. A similar number of establishments was observed 10 years ago when 73,570 businesses were registered,” the 2020 report reads.

“This year’s decline is considered the most significant loss of establishments documented by the survey since its launch in 1983.”

The newly released report on the 2021 survey is far from sunshine and rainbows, but it’s good to see that things haven’t gotten dramatically worse during the second year of the COVID pandemic.

Toronto may have lost thousands of businesses last year – new and old, big and small, local and global – but is getting them back in one clip. We hope to have a net positive in 2022.

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