Your Reading List

Comment: The end of cities?

The work-from-home revolution could lead to a rural renaissance

During the pandemic, a good number of younger Canadians have left cities for the suburbs, or in some cases, the countryside.

It is no secret the pandemic has caused many Canadians to move from cities to the suburbs and even the countryside.

According to Statistics Canada, the phenomenon led to a record loss of population in Toronto, Montreal, and Vancouver in 2020.

Vacancy rates are skyrocketing in many urban centres across the country. The same phenomenon is happening in most parts of the western world. Some recent real estate reports also suggest that 2021 will be more of the same.

Toronto recorded a record loss of 50,375 people between July 1, 2019 and July 1, 2020. The number for Montreal was around 35,000. The loss in Vancouver was measured at around 15,000. It is not new to see city dwellers leaving cities, far from it. But they are often replaced by new immigrants. But the pandemic has accelerated the flow of people leaving cities, especially among young people.

Almost a third of the increase in outflows of people were between 15 and 29 years old, and 82 per cent were under 45 years old. These people represent younger generations who are slowly and quietly abandoning city life.

Of course, the cost of city dwelling is a cruel barrier. Current interest rates which are at historically low levels is making borrowing almost costless. Real estate is now out of reach for many households with low incomes. CIBC’s latest report on income gaps clearly demonstrates how COVID has made the poor, poorer. Leaving cities is more tempting than ever.

Telecommuting also offers an opportunity for many to afford an escape from businesses and the chaotic traffic cities tend to have. The working-from-home phenomena brought by the pandemic will not disappear any time soon. Several surveys suggest that almost a quarter of employers in Canada plan to let their employees work most of the time from home after the pandemic is over.

While several companies are currently reviewing their ergonomic and workspace strategy, landlords are struggling to find new tenants. Leases are being repurposed and renegotiated to reduce cost and accommodate part-time presence by employees, boutique style. COVID’s legacy will be about getting more people to work from home, more often.

A domesticated, more sedentary market will consume food differently. Our culinary ambitions at home have changed since March 2020. With more cooking and even gardening, Canadians are becoming food literate.

A smarter, more knowledgeable public about food systems will shop for food differently. Grocers will need to revise their real estate strategy. Restaurants are not immune to what is happening either.

The Starbucks chain announced it will close 300 stores by the end of March. Most of these outlets are in shopping malls, and of course, in city centres. On average, a Starbucks generates approximately $600,000 in revenue annually. It is basically $150,000,000 to $180,000,000 of business that will need a new home, spent elsewhere. Most importantly, it’s less money spent in urban centres.

Out of 98,000 restaurants, approximately 10,000 have closed since the start of the pandemic, according to Restaurants Canada. Some have closed permanently. Of some 10,000 cases, over 90 per cent are in urban city centres with more than 200,000 people.

As with other food-service chains, Starbucks will likely go where the money is. But most importantly, this money is held by younger consumers whose economic influence can only increase over time. As we slowly leave a pandemic-preoccupied era, more food companies will need to adjust how they retail and service a transitioning food marketplace.

This mass movement towards rural Canada, however, could also present an opportunity for some forgotten independent operators who have been operating in the shadows of burgeoning downtowns across the country. Unique restaurants and retailers could see more people give these remotely located outlets a second wind.

With what’s happening, rural Canada may be getting its mojo back which is not necessarily a bad thing.

About the author

Contributor

Sylvain Charlebois is senior director, Agri-Food Analytics Lab, and professor in food distribution policy, Dalhousie University.

Comments

explore

Stories from our other publications