City centers are deepening, but small towns and suburbs tell a different story

The centers of most major Canadian cities continue to face significant declines in foot traffic compared to pre-pandemic norms — but the opposite is true for smaller cities and suburbs within commuting distance of those cities, data from a new study shows.

The results of a study by the Canadian Chamber of Commerce’s Business Data Lab suggest that nearly three years after the pandemic, a new economic pattern is emerging in metropolitan areas across the country — the hollowing out of major city centers for largely hybrid work and the growth of mobility in those cities’ outlying areas.

“Canada’s largest cities are lagging far behind when it comes to workers returning to the office. But we found that there was a substantial increase in activity in downtowns within driving distance of those cities,” said Stephen Tapp, the chamber’s chief economist.

The report, which also drew on data from Statistics Canada and marketing and research firm Environics Analytics, measured worker mobility in more than 150 metropolitan areas and 55 centers across the country using data from commuters’ cellphones. The data basically tracks how many people in a given geographic location left their homes and commuted to their offices.

Mobility, or worker movement, in downtown Toronto was 46 percent lower in September 2022 — when most large white-collar firms began mandating back-to-the-office policies — compared to January 2020. In Ottawa, it was 45 percent lower in the same time frame. Vancouver saw a 48 percent drop in mobility compared to pre-pandemic times, while Calgary saw a 42 percent drop.

Meanwhile, the Ontario cities of Brampton, Barrie and Brantford — all within a two-hour drive of Toronto — saw mobility increases of about 30 percent between January 2020 and September 2022. Smaller cities near Montreal and Quebec City, such as Trois-Rivières and Sherbrooke, have also seen significant increases in foot traffic during the pandemic.

Overall, 14 of the 55 centers experienced increased mobility over the period, and most of these centers were in small towns.

The data doesn’t fully explain why a downtown like Barrie would see a surge in people moving — if a remote worker who used to work in an office in Toronto now lives and works from home in Barrie, it stands to reason that this person would not leave their home to commute to downtown Barrie for work.

But according to Mr. Tapp, a pattern in the data could indicate an increase in the number of remote workers in a city like Barrie, which in turn has led to an increase in economic activity to service those workers.

“It could be that there are more people going to downtown Barrie now than before the pandemic because the city has grown, more services like restaurants and retail have sprung up, and those businesses need workers,” he explained.

Montreal appeared to be an outlier, with data suggesting the city center has almost recovered to pre-pandemic norms — with mobility down only 3.5 percent compared to January 2020.

Gatineau, a city whose economy relies heavily on federal civil servants, saw the biggest drop in mobility in 55 centers of Canada – a drop of almost 75 percent.

The report also found that cities with a higher proportion of women have a slower recovery in walking, and cities with a higher proportion of commuters who use public transport to get to work also have a more muted recovery.

Mr Tapp said if these mobility patterns were sustained, it could mean greater opportunities for businesses in smaller towns and increased local economic development.

“Where we have the movement of people over time, you’re going to have the movement of businesses that serve the needs of those people.”