Recently, I had the pleasure of joining a number of fellow small business owners and other local business leaders at a roundtable discussion arranged by Toronto Deputy Mayor Norm Kelly and Councillor Michael Thompson. The purpose of the roundtable, we were told, was to get our views on what the city is doing right, or not-so-right, vis-à-vis small business. It is a good question, and one that, in my opinion, should be getting much more attention.
My family set up a tailor shop on King Street in 1908. At the time, we joined a bustling small business community that I dare say was the beating heart of a growing city. Everywhere you looked, little shops were popping up. Admittedly, not all of them were success stories, but the city was certainly inviting to the young entrepreneur. Everything seemed possible.
The tone of the comments at the recent roundtable, and indeed, my own experience, suggest that this golden age of entrepreneurship in Toronto is now a distant memory. Today, more than 100 years after we set up shop, Walter Beauchamp (Tailors) Inc. still stands, but although it pains me to say it, our business is the exception rather than the rule, thriving with a loyal clientele and a small but dedicated staff, we stand where hundreds of others have fallen.
Where small businesses once stood, now can be found a combination of corporate cookie cutter stores, and perhaps more troublingly, “For lease” signs, as far as the eye can see. So what happened to our entrepreneurial city? Is the change simply a product of the city’s growth, or something more?
I am not an economist, but I can speak from my experience, and that of my family. If I were looking to start a business today, Toronto would not even be a consideration. With an established clientele, we are able to do very well here. But a startup in Toronto right now would be a tremendous risk, and the reason is quite simple: it comes down to cost.
There are certain costs inherent in running a business in Toronto, which has some of highest property values in the country, but given these costs, you would think that civic leaders, wanting to keep the city strong and vibrant, would do everything in their power to provide incentives to set up shop here. What I’ve seen, however, is hardly encouraging.
Take property taxes, for instance. Sure, the city has done some work to address the gross discrepancy in the way that businesses are taxed, yet businesses still pay more than twice what residents do on same property value, and have to pay extra for a number of services, like water, sewer and garbage collection, which is included in residential rates.
Red tape is another big problem. The city has made some headway on reducing red tape by way of improved online offerings through bizpal.ca, but much more needs to be done to streamline the way businesses deal with the city in terms of getting permits, licenses etc. A one-stop-shop, it is not.
Then there is infrastructure. Yes, we need to improve infrastructure, but there is a limit to the costs a business can pass on to its customers. The fact is that even if businesses are being taxed more, nobody is going to pay seven dollars for a coffee or a chocolate bar. Consumers, interestingly, don’t care about a business’ costs. Nor should they. They expect to pay the going rate, and not much more.
And costs aside, the manner in which transit expansion is being undertaken leaves much to be desired. It is almost as if city planners did not contemplate how the endless construction at every street corner would impact the small businesses that are supposed to be the lifeblood of the city.
Ultimately, the people who should care about the cost and convenience of doing business in Toronto, and the ongoing viability of running a small business in this great city, seem to have other things on their mind. Admittedly, the Deputy Mayor and Counsellor Thompson are on the right track, and asking the right questions, but I fear the exercise will do little to reverse the current exodus of small business, unless there is a fundamental shift in the way government views our contribution. As long as business is seen as the cash cow, the ‘For lease’ signs will continue to multiply.
We have yet to see if small businesses will survive under the current conditions. Moving our business to the suburbs, while tempting from a purely financial standpoint, is not something we are likely to consider, given our current proximity to our clientele. The city’s entrepreneurial heart, which has diminished over time, may not have the resilience to overcome the continued apathy and indifference of our civic leaders.
Terry Beauchamp is the CEO and owner of Walter Beauchamp Tailors Inc., a 105 year old third generation family owned clothing business in Toronto which specializes in both civil and military tailoring.