Montreal has unveiled plans to compensate retailers and other companies hurt by lengthy construction work, raising hopes among business groups that other Canadian municipalities will follow suit.
Mayor Valérie Plante’s administration vowed Wednesday to help businesses mitigate the impact of work projects undertaken by the city, which have ballooned in Montreal of late. Among the measures announced, the administration said it would earmark $25-million over six years to reimburse businesses that have suffered from disruption. Each business can claim a maximum of $30,000 a year, the city said.
In recent years, Montreal’s construction situation has become a source for endless criticism and jokes among residents and visitors alike, who find themselves navigating sometimes impossibly difficult detours to get to their destinations. Frustrated by construction work that can drag on and drive customers away, merchants have fought back. On Bishop Street, a 42-month project to renovate a subway station’s ventilation system has already brought foot traffic to a halt, leading business owners to sue the transit authority for lost sales.
Nearby, entire swaths of Montreal’s well-known Saint-Catherine Street have been dug up as a multiyear project to replace water pipes and widen the sidewalks gets under way. Several retailers and restaurants have already decamped because they’re not willing to shoulder the pain, leaving empty storefronts in their wake. A similar thing happened when Saint-Laurent Boulevard and Saint-Denis Street underwent major remodelling earlier this decade and those arteries are still recovering now.
To win restitution under the new plan, merchants will have to prove that construction work caused them to lose business. The program is expected to be enacted in the summer and business owners will be able to apply for aid beginning in the fall. Compensation is retroactive to Jan. 1, 2016.
The sums offered likely won’t mean much for bigger retailers like Hudson’s Bay Co., which has reportedly postponed plans to renovate its downtown Montreal store. But they could make a difference for smaller players, who are not immune to the massive challenges like e-commerce lashing the sector.
“Extended roadwork can have devastating effects on small businesses, which often lose sales, have to borrow to relocate to survive, or even close down altogether,” the Canadian Federation of Independent Business said in a statement, adding the city’s new policy is a promising first step to ensure they stay afloat. “We commend Montreal for showing leadership on this issue and encourage other municipalities to follow its example.”
The city’s compensation plan is “significant” and will motivate the city to avoid delays on its work sites at all costs, said the Chamber of Commerce of Metropolitan Montreal, which applauded the plan. The mayor’s team also needs to act on taxation because Montreal’s businesses face the highest tax levels of all big Canadian cities, the group said.
The Retail Council of Canada said it welcomes the intent of the policy but declined to comment further.
With annual retail sales of more than $40-billion, Montreal is Canada’s second-largest commercial hub, according to the city’s economic development department. Nearly one in 10 jobs in the greater Montreal region are tied to retail.