Graham Daswell gritted his teeth, packed up all his store’s belongings and moved shop after 30 years in the same location on Bloor Street West in the heart of the Annex.
He had sat down with his landlord in the run-up to his lease renewal date for his store Alternative Arts, which does custom printing and framing, last spring. The rent increases over the years had became untenable, he told them, but they couldn’t come to a satisfactory agreement.
Luckily, a retail space a few steps away became available for thousands of dollars less.
“It didn’t make financial sense for us to stay so we decided to move, which was a bit of a nightmare with all the equipment and inventory in our store,” said Daswell. “But we’re very happy here.”
Daswell, who did not wish to disclose exact rent figures, said the previous storefront sat vacant for over a year.
Small businesses have experienced a “perfect storm” of misfortune over the past several years. The pandemic, inflation, high cost of living, rent hikes, construction, and now recession fears from U.S. trade wars have dealt crushing blows — causing some neighbourhoods to lose their eclectic storefronts to big chains or sit vacant.
Between 2022 and 2024, Bloor Annex, Mount Dennis, and Uptown Yonge business improvement areas (BIAs) experienced notable declines in the number of establishments, each losing more than 10 per cent, according to the City of Toronto.
Experts say more can be done from the municipal and provincial governments to ensure small businesses thrive in the city, such as introducing commercial rent control, providing greater financial support, and promoting buying local, to ensure Toronto neighbourhoods remain vibrant.
“Small businesses have had so many different factors coming at them, creating this perfect storm,” said John Kiru, president of the Toronto Association of Business Improvement Areas (TABIA).
“The reality is, many are still recovering from the pandemic, having just paid off their government loans, and now there’s these tariffs, which create so much uncertainty and hurt business and consumer confidence.”
Small businesses repeatedly knocked down
Presse Internationale, the giant international magazine emporium, had to move from their location at Bloor Street West and Brunswick Avenue when they got slapped with a rent hike of $4,000, which would have brought their total monthly rent to $11,000. A staple in the neighbourhood since 2005, it was devastating to locals. They recently found a new spot store down the street, on the second floor above the Maji Curry restaurant.
While they and Alternative Arts were able to relocate nearby, many businesses are often unable to find more affordable options in the same neighbourhood.
Between 2022 and 2023, landlords raised retail rents in Toronto by 32 per cent, according to Better Way Alliance — a network of business owners and non-profit executives who advocate for better worker and employer rights. In part, the staggering rent increase is attributed to the lack of commercial rent control in the province, meaning at the end of the lease term, rent can increase by any amount.
Another blow is construction from new condo towers and transit stations, experts say. While housing developments are welcome and sorely needed, the impact on local shops can be devastating, they add.
Toronto city councillors Mike Colle and Josh Matlow said in 2020 they counted 140 business closures from Black Creek Drive to Yonge Street along Eglinton Avenue West due to the Light Rail Transit (LRT) construction, which began in 2011.
Today, there’s “a bit of an exodus” occurring at Queen Street West and Spadina Avenue for Ontario Line construction, said Arlin Markowitz, executive vice-president of the Urban Retail Team at Commercial Real Estate Services (CBRE). When an old building is torn down it takes years to build and therefore occupy the new commercial space, disrupting the natural flow of the shopping experience, he said.
Small businesses have also been hurt by land speculation, Markowitz said. A typical lease is 10 years, but during the condo boom, landlords didn’t want to lease out storefronts for longer than a couple of years “because they thought they were sitting on land that would form a future condo.”
Now that condo development has slowed considerably, businesses might catch a break as landlords will be willing to attract high-quality tenants for longer term leases, he added.
What can be done to help small businesses?
Toronto City Council has passed motions advocating for the province to implement commercial rent control, especially for small and locally owned businesses.
Condo developers could also provide smaller storefront spaces of 5,000 square feet or less to attract small businesses in new developments, and offer short-term leases or pop-up storefronts to promote local businesses, said Markowitz.
That’s something developer Westbank is trying at Mirvish Village, where they’re planning micro retail spaces with short leases to attract small businesses and have a better community feel.
Experts have also noted several efforts by the city to help small businesses such as the transit expansion construction mitigation grant program, which gives funding to BIAs and associations to mitigate the impact of construction on local businesses.
There is also the small business property tax subclass, which provides a tax rate reduction of 15 per cent of the commercial rate. The Canadian Federation of Independent Business has said it’s a step in the right direction but they’re pushing for the tax rate reduction to be 20 per cent.
Not all is lost
At the end of the day, strong buy local movements are still bringing people to neighbourhoods to shop, “activating communities” to support small businesses, TABIA’s Kiru said.
While pockets of Toronto are struggling, the city noted that between 2022 and 2024, more than a dozen BIAs saw the number of establishments rise, each gaining 10 per cent.
Ossington Avenue, St. Clair and Mount Pleasant still have thriving thoroughfares, and pockets all over the city from Roncesvalles to Leslieville are continuing to attract visitors.
Brian Burchell, general manager of Bloor Annex BIA, said the area has a “very vibrant, highly successful main street.”
“Though nearly 70 per cent are food establishments or bars there remains a durable presence of eclectic businesses giving Bloor Annex a real village feel,” he said. “Though we suffered along with everyone else during COVID, we bounced back.”
Daswell said he’s seen a lot of change in the Annex over 30 years, but says the residents in the area have had a strong desire to buy local — well before the recent tariffs. Big chains such as Second Cup, Starbucks and Chipotle have come and gone, but there’s still numerous local storefronts that have remained.
“The Annex is unique,” he said. “People prefer to opt for the small retailers as opposed to the big chains.”
