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Greater Victoria business community sees hope and hurdles in 2021

The COVID-19 pandemic turned the economy upside down, ­devastating some industries while it gave others a surprising boost.
Victoria’s Inner Harbour attracts only a few visitors on a moody day during the coronavirus pandemic that has wreaked havoc on the region’s tourism sector. DARREN STONE, TIMES COLONIST

The COVID-19 pandemic turned the economy upside down, ­devastating some industries while it gave others a surprising boost. As the year drew to a close, the Times Colonist canvassed Victoria’s business ­community about the impact of the events of 2020 and what can be expected from 2021. While they acknowledged the difficulties posed by the pandemic, many see a resilient region that continues to weather the storm and may even have established new priorities.

Saul Klein
Dean, Gustavson School of Business at UVic

Saul Klein expects 2021 to be a year of recovery, but he hopes the world doesn’t just revert to the way things were.

“My hope is that the experience of 2020 makes us all think more about our interconnectedness, that we recognize how we are impacted by the actions of others, whether we like it or not, and how we, in turn, have an impact on the lives of others,” said Klein.

“I hope that we will see a growing sense of purpose in individuals and organizations as they are being called upon by customers, employees and shareholders alike to play a more positive role in society.

“I hope that there is more concerted effort around solving the big challenges we face in the world, such as climate change, rising income inequality and issues of social justice. I hope that we will see interconnectedness as a positive thing and not as a threat.”

The rapid development of vaccines is a great example of how international co-operation leads to more innovation, faster solutions and better responses, said Klein, who doesn’t expect to start seeing true recovery until the second half of 2021.

When it comes to work and education, he expects a blend of old and new — a mix of in-person and at-home study, and remote and in-office work.

“We have learned that working from home is not as difficult to manage as many organizations were concerned about or as attractive as many people hoped,” he said. “The result will be more flexible work arrangements where many people will combine both modes of work. We have seen that productivity is not undermined when people work from home, but the lack of face-to-face interaction is hard on many people and it is difficult to build and sustain a positive culture in the workplace with only online connections.”

Jill Doucette
Chief executive, Synergy Enterprises

Jill Doucette sees possibility and promise ahead as the country begins to recover from the economic devastation of the pandemic.

She expects that climate action, sustainable development and the circular economy will play a large part in shaping the economic recovery and federal spending. “Right now, it’s about helping the businesses we work with identify how these principles can align with their recovery and or growth strategies, depending on how their business was affected by the pandemic and all other unforeseen events of 2020.”

She has seen innovation in a variety of sectors, from manufacturing and technology to agriculture, that may make the region more resilient.

“COVID-19 has exposed the cracks in many systems, both globally and locally. I hope 2021 will bring forward some meaningful ways to address those cracks, such as food systems, waste and inequality,” she said.

Doucette is concerned about the lack of certainty the tourism industry continues to face, but that’s tempered by the promise of new green businesses launching in the midst of chaos.

“Though there has been so much suffering within the small business community, we are resilient. We are a community that supports one another and we will rebuild, perhaps even better,” she said.

Scott Phillips
Founder, Starfish Medical

Scott Phillips, whose company has grown into the largest medical-equipment firm in the country over the last few years, says the pandemic’s effects haven’t been all bad. For one thing, it has improved remote-working infrastructure and better prepared the country for the next virus outbreak.

“COVID has fueled a huge acceleration of diagnostic and therapeutic discovery and delivery tools,” he said. “We will be in an immensely better position to respond to another pandemic.”

People are now accustomed to the technology used for remote working, Phillips said, which means remote training can be more efficient, while companies with wares to show off can use technology to reduce the number of trade shows they have to attend.

“We’ve had no in-person client or sales meetings since March. Amazingly enough, we’re still signing up new clients around North America,” he said. “I guess the buyers have the same problem. If the new behaviour sticks, it will be good for all companies in Victoria that are selling to distant clients, as it levels the competitive playing field.”

Phillips acknowledges, however, that working together in person is better for the kind of complex work his company does.

“Every week that goes by chips away at the relationship equity in the company a little bit,” he said. “So far, we’ve weathered the storm OK culturally. The sooner we can be together, the better.”

With vaccines, better therapeutic drugs and faster testing on the way, there is reason for hope, he said.

“Vaccines have obvious benefits. We’ll learn more about them over time. Widely available therapeutics mean people could be less concerned about getting COVID. Fast, inexpensive testing, particularly daily testing focused on finding infectious people, could be a huge key to getting people back together,” he said. “How those COVID response tools are made available, as well as to whom and when, will affect how we all get back to working, shopping, dining and socializing.”

Paul Nursey
Chief executive, Destination Greater Victoria

For Paul Nursey, the arrival of vaccines means the promise of a modest recovery for the province’s ­tourism industry, if visitors can once again book trips. But rebuilding to where the industry was pre-pandemic will take another three to five years, he said. “In spite of government supports, we are not out of the woods yet by any means.”

The wholesaling season for international tour operators for 2021 has been lost, Nursey said, and ­concerns remain about business and international ­visitation prospects in 2021. Nursey’s worries include the prospect of losing air routes to the Island, the future of now docked international ferry operators like Coho and Clipper, and the effects of a slow year and slow start in 2021 on small players in the industry.

“I see other provinces, states and countries ­deliberately planning a safe, competitive and co-ordinated reopening of the visitor economy and I don’t yet see that degree of planning or co-ordination from the province of B.C,” he said. “Our industry ­cannot sustain two staggeringly bad years in a row. “Nursey said during the pandemic, it became clear that governments have a limited understanding of the tourism industry, its ripple effects and how it can be helped or hurt.

“Once we are through this second wave, and ­vaccinations start to take hold, a more cohesive, timely, inclusive and planned reopening in 2021 is required,” he said, adding he hopes policy makers have learned from mistakes made in 2020.

There is hope on the horizon, however, as there is considerable pent-up demand for travel and the region is still considered an attractive destination, Nursey said.

Another bright note is how seriously the industry took safety protocols, ensuring there were no serious outbreaks in the region this summer, he said.

“Working with the highly collaborative industry and government partners in Greater Victoria gives me hope, optimism and a sense of purpose and drive every day.”

Reid James
General manager, Hotel Grand Pacific

Reid James anticipates slow improvement in the hospitality sector in 2021, with a very slow first quarter and improvement in the second quarter. The second half of the year could get a boost from a limited number of bus tours, leisure travel and perhaps the return of business meetings, he said.

“My concern now and in the first quarter is that the case counts become worse from the holidays and the government does a wholesale shutdown versus a regional shutdown,” he said, adding he is disappointed by the province’s lack of “significant assistance” for the tourism industry.

James said the lone bright spots on the horizon are the early arrival of a vaccine and the fact Ottawa will continue the wage subsidy through June.

Casey Edge|
Executive director, Victoria Residential Builders Association

Casey Edge believes the housing industry will ­continue to be driven by historically low interest rates, in-migration and improving employment numbers in 2021, and says the region can expect to see about 3,000 new homes started, about the same as in 2020.

He’s concerned, however, about municipalities adding more regulations and higher fees, pointing to a recent study from the C.D. Howe Institute suggesting regulations and fees could add $230,000 to the cost of a new single-family home in this region.

Buoyed by the prospect of a vaccine being readily available, Edge sees some hope for his industry if the province imposes new, more efficient rules for development and permitting processes.

Rahim Khudabux
Owner, Max Furniture

Rahim Khudabux said the last year has highlighted the ability of the region to come together and support local businesses and retail stores.

“Victoria and Vancouver Island have a strong local economy that looks after itself and I truly believe people want as much business to stay in the region and on the Island as possible,” he said.

His concerns centre around the things the region can’t control, such as COVID wreaking havoc on supply chains, travel and buying patterns.

“It makes it very difficult to forecast even a week ahead sometimes,” he said.

“If the vaccine can start being implemented and people continue to follow our health guidelines, we can see more consistency in 2021 in regards to activities in our region.”

Khudabux said what gives him hope for 2021 is the fact the pandemic has put everyone on the same team.

“We are all in support of moving past 2020 and moving on in 2021 with hopefully a vaccine that will bring some normalcy to our lives.”

Mike Murphy
Owner, 10 Acres Farm and Restaurant Group

Mike Murphy is setting his sights on 2022, which he says could be “outstanding” if it builds on slow improvements in 2021.

Murphy said the pandemic laid bare one of the ­problems facing the downtown core — loss of business from residents of surrounding areas who no longer come downtown.

“With the steady rise in people making downtown home as well as the abundance of bakeries, cafes, butchers, bars and the like, downtown should be experiencing the opposite,” he said.

He suggests the city has been too willing to accommodate the cruise-ship business rather than catering to locals and visitors staying in hotels.

“That we need quality tourism is a given, but do we need the proliferation of day trippers?” he asked. “Don’t get me wrong, I’m not against cruise ships.

However, I think we have come to rely too heavily on them at the expense of the hotel traffic as well as the people that live here.”

He suggests limiting cruise ships to weekends and cutting back the number of calls through the summer.

“Victoria is far too nice a place to live and visit for us to be selling ourselves out to day-trippers that really don’t bring much to the dance,” he said.

Marci Hotsenpiller
Owner, Zinc PR

Marci Hotsenpiller, who splits her time between Victoria and the Comox Valley, said 2021 could see a transition in the world of public engagement.

“It was amazing to see groups and governments across the Island move quickly this past year in terms of shifting their public engagement online, thanks to tools like Zoom,” she said. Yet there is also a pent-up desire to connect in person, she said, which could lead to engagement models that blend online and in-person events.

Hotsenpiller said work and play being driven online by the pandemic raises health concerns — both mental and physical. “Job and career burnout, plus physical or personal burnout is a real risk. Thankfully, the conversation about wellness and mental health in the workplace, at school, and among social groups has been active and fairly open this past year.”

Hotsenpiller said her hope for the new year is for more support for tourism, which she said has been a massive creator of jobs and vibrant experiences.

“I’m hopeful that support will come for this sector. A much-needed highlight would be funding to support tourism plus some new and innovative grant programs to help people from different backgrounds start new companies and tourism businesses here,” she said. “Tourism and wellness, for example, could merge together to create new tourism experiences on the Island. That would be a creative highlight that could make great economic sense.”

Rob Reid
Owner, Frontrunners

Rob Reid hopes the region has learned lessons through the last year, including how never to go through anything like it again.

“I never wish to stand outside my stores again and tell customers they cannot come in,” he said. “[This year] saw us rewrite a new and abnormal business plan, where we exercised our creative talents, and ran with it the best we could to survive.”

Reid said online shopping picked up and curbside pickup was unfortunately the norm, though not ideal when proper fitting of activewear is key to getting people outside and improving both their physical and their mental health.

“We hope in 2021 and onwards that people in our region will continue to get out and walk or run for the health of it,” he said.

“We know more than ever how important activity is for our physical and mental health. In 2021, adding the social aspect back to the activity, too, will be monumental for the full effect of the experience.”

Reid believes 2020 has taught everyone they have a part to play in making things better in the region.

Emilie de Rosenroll
Chief executive, South Island Prosperity Partnership

There’s a healthy recovery in the future, according to Emilie de Rosenroll, but it’s likely not coming until the third quarter of the year, when vaccines should have been broadly distributed across the country.

“COVID sent a powerful signal that we have to work collaboratively to strengthen and diversify our economy to withstand future economic shocks,” she said. “The work of SIPP’s Rising Economy Taskforce, which we convened at the start of the pandemic, is all about creating this resilience across all sectors.”

De Rosenroll noted the effects of the pandemic differ between sectors and individuals, with vulnerable populations, lower-skilled workers, women and First Nations feeling a disproportionate amount of the pain.

“Many Indigenous communities right here in our region do not have access to the tools needed to work from home and struggle with insufficient bandwidth, lack of transportation options and so on,” she said. “This is unacceptable in 2020 and as we move into 2021 and beyond, we must come together as a community to ensure none of us is left behind.”

De Rosenroll sees hope in the fact that the focus for many has been switched to family and health, and that the pandemic pushed some to innovate and transform operations.

Jeff Bray
Chief executive, Downtown Victoria Business Association

While vaccines have brought hope and a new year always means a chance for a fresh start, Jeff Bray believes more pain is ahead for Victoria’s downtown core — including more business closures — before there’s any kind of recovery. “I believe things will continue to be challenging for retail, food services and hospitality through until summer,” he said. “However, we have strong economic foundations in the CRD, so I expect we will rebound faster than the B.C. or Canadian average. The key will be to continue to support local through the winter and spring of 2021.”

Bray said policies are needed to support small and medium-sized businesses and ensure downtown remains an attractive place to invest.

“We also have to refocus on public safety and ensuring people feel safe and downtown is seen regionally as a safe and clean place to visit.”

One reason for optimism is the commitment from residents to shop at local stores, something Bray hopes will continue post-pandemic.

“Greater Victorians really embraced shopping locally. In doing so, people have discovered or rediscovered what great businesses we have in the region and downtown,” he said.

Ian Robertson
Chief executive, Greater Victoria Harbour Authority

For Ian Robertson, the big question is when the border with the United States will reopen.

“I am confident that when it does, the cruise industry will be able to operate again in a manner that is safe for passengers and the residents of Greater Victoria.”

For now, his concern is for the small businesses that rely on the tourism industry, as they will struggle to survive a very quiet winter after one of the slowest summer seasons on record. “We need them on the other side,” he said.

What gives him hope is the galvanizing effect of adversity on the region. “While this has been an unprecedented year full of challenges, I have been moved at how our community has come together and supported each other,” he said. “Businesses have had to be innovative and they have responded by changing and then changing again. We will recover and when we do, we will all be the better for it.”

Bruce Williams
Chief executive, Greater Victoria Chamber of Commerce

Bruce Williams said the pandemic has exposed the housing and mental-health crises facing the province and city, and “decisive” solutions are needed.

“Care needs to be undertaken right away to mitigate these situations and stabilize public safety,” he said, adding housing will remain a top issue this year.

Williams said there are still areas of the Victoria economy that have been overlooked by government relief efforts, including the tourism, hospitality, retail, food and beverage sectors.

“For these sectors of the economy to survive mandatory restrictions and continue once the economy recovers, there needs to be assistance now.”

The new year also holds the promise of opportunity, he said, and a chance to ensure displaced workers are trained with in-demand skills, and newcomers to Canada and First Nations are better integrated into the workforce.

“There are many jobs that needed workers before COVID, and will still need them after the pandemic.

A skilled workforce enables more people to enjoy stable lifestyles and increases the opportunity for businesses to prosper.”