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Center Street leading into the downtown center of Calgary, AB. (SolomonCrowe/Getty Images/iStockphoto)
Center Street leading into the downtown center of Calgary, AB. (SolomonCrowe/Getty Images/iStockphoto)

‘Scary’ economic conditions spur rise in Calgary business closings Add to ...

James Belcher opened a restaurant in downtown Calgary last year, aiming to build something “a little newer and fresher” in a space where the previous business had failed.

Still, he couldn’t help but feel hesitant. “You think, ‘if they can’t make it, what about me?’” says Mr. Belcher, managing partner at Paper St.

Two years into a painful recession in the province, many small-business owners are fighting to keep their businesses alive.

Paper St. opened on 8th Ave downtown in May, 2016, in a large space previously home to a pub. A month later, a few doors down from Paper St., Escoba Bistro and Wine Bar closed.

“Out of business due to the challenging economic climate in Alberta worsened by our civic, provincial and federal government bodies,” reads a note on Escoba Bistro’s website.

Read more: Calgary housing market faces another tough year as economy slowly recovers

Also: In Calgary's bust, some businesses bloom

Also: Alberta's tough economy forces businesses to look outside province

The 8th Ave. mainstay was one of 7,214 businesses that closed in Calgary last year, up from 6,680 the year prior and 5,865 in 2014, according to business licence numbers from the City of Calgary’s community standards department. Those numbers could be even higher, as not every type of business in the city requires a licence.

Blocks from Paper St., one of Alberta’s oldest businesses, western-wear store Riley & McCormick, closed its doors in August. Nearby Trib Steakhouse also shut down earlier in the year.

While many “For Lease” signs still decorate empty storefronts on Stephen Ave., other spaces are coming back to life, as new businesses move in.

In 2016, the City of Calgary issued 7,376 new business licences, up from 7,081 in 2015, and 6,837 in 2014.

“When the economy goes down, we actually get busier as applications go up,” says Kent Pallister, chief licence inspector with the City of Calgary. Mr. Pallister says there’s been an increase in the number of home-based businesses seeking licenses, many by people who have been laid off from their jobs.

Adam Legge, president and CEO of the Calgary Chamber, says that various industries have been hurt by the slowdown in the energy sector.

“What we’re seeing is a lot of the businesses affected are those that have been really reliant on the spending of the oil and gas industry, ranging from manufacturers and suppliers and drillers down to restaurants and caterers and retailers,” Mr. Legge says.

In downtown Calgary, shops and restaurants continue to see fewer customers because of the downturn, Mr. Legge says. At the same time, business owners faced a $1 increase to the minimum wage in October, 2016, and a carbon tax implemented on Jan. 1, 2017. “They’re being hit with a double whammy,” he says.

Paper St.’s Mr. Belcher, who has owned and managed restaurants in the city for the past 18 years, has noticed customers are paying attention to nightly specials and trying to stretch their dollars. At two downtown pubs he operates, Mr. Belcher estimates revenue fell 30 per cent and traffic dropped about 20 per cent last year.

While business at the new restaurant has met projections so far, Mr. Belcher says the October increase to $12.20/hour for minimum wage, as well as the elimination of a liquor server rate, was a particularly big hit. “It really has been a scary time and a challenging time,” he says.

The emptying of downtown office and retail spaces has also led to an increase in the number of businesses moving within Calgary. Last year 1,411 businesses moved, up from 1,350 in 2015 and 1,260 in 2014. Businesses are relocating because they can’t afford existing spaces, or they are taking advantage of cheaper rents elsewhere, Mr. Legge says.

Richelle Love, co-owner of Tri It Multisport, says the sports shop specializing in triathlon products left the location it had been in for 10 years at the end of October to move closer to downtown, where many of the store’s customers work.

For Darren Hamelin, owner of Escoba Bistro, a combination of factors led to the “heartbreaking” closure of his business which he had operated for more than 20 years, including 10 years on 8th Avenue.

He closed Escoba Bistro at the end of June, 2016, losing his job alongside 30 full-time employees. “When a small business goes down, a lot goes down with it,” Mr. Hamelin says.

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