HBC'S court action gaining wide support from retailers
Move `tip of the iceberg of the frustration and the pain' of lockdown-hit industry
Hudson's Bay Co. ULC'S legal fight against lockdown orders in Ontario is drawing significant support from the broader retail sector as the provincial government expands its shutdown orders into two more regions.
The legal challenge, which Hudson's Bay filed in Ontario Superior Court on Thursday, is just the “tip of the iceberg of the frustration and the pain” among retailers in lockdown zones, Ontario Chamber of Commerce chief executive Rocco Rossi said.
But he stopped short of saying the action is a beacon of hope for the industry, only that it is another sign of the widespread angst among shopkeepers in lockdown.
Law experts have questioned HBC'S chances of winning a favourable ruling, especially considering courts in Canada have been deferential to public-health authorities during the pandemic.
“I don't know whether it will work or it won't work. I hope it works,” said Larry Rosen, chief executive at luxury menswear chain Harry Rosen Inc.
“We are just getting absolutely punished financially.”
Major retailers and industry advocates have loudly criticized government restrictions in the currently locked-down zones of Toronto and neighbouring Peel Region, where non-essential retailers have been forced to shut down, aside from delivery and curbside pickups, since late last month.
Big-box chains that sell both groceries and non-essential goods — such as Walmart, Costco and Loblaw — have been allowed to remain open, riling their competitors.
In HBC'S court filings on Thursday, it said the restrictions were “incoherent and devoid of logic” and asked a judge to either invalidate the orders or at least allow department stores to be exempt.
But the provincial government has for weeks resisted calls to loosen the rules or force the bigbox chains to only sell essential goods.
Ontario Premier Doug Ford has said he is following public health advice in an attempt to tamp down a surging second wave of infections. On Friday, the province announced it was moving York Region, north of Toronto, and Windsor-essex, into lockdown as well.
“This is a nightmare for our merchants, just a nightmare,” said Diane Brisebois, chief executive at the Retail Council of Canada.
Since HBC filed its application for a judicial review on Thursday, Brisebois said she has been hearing from retailers that are “very supportive” of the move.
“There's an incredible sense of angst and frustration,” she said. “I get to the end of the day and I feel like I'm 110. And I just feel sick to my stomach.”
Harry Rosen has locations at major shopping malls in Toronto and Peel Region, including the Eaton Centre and Square One.
He said two of his flagships in Toronto — one at Yorkdale Shopping Centre and the other on Bloor Street's so-called Mink Mile — usually make “millions of dollars a week” in sales during the December holiday shopping rush.
“This is like telling salmon fishers not to fish during the salmon run,” Larry Rosen said.
But he added that he's also concerned about containing the spread of the virus, and would be open to making sacrifices if it was clear they were making an impact.
“All that's happened is they've just sent the retail dollars to other retailers that could stay open and other jurisdictions that have open stores,” Rosen said. “And we weren't the problem to begin with. It's a terrible, terrible, terrible outcome, which is spreading around the pain in a very unequal manner.”
Alla Drigola, director of parliamentary affairs at the Canadian Chamber of Commerce, said the lockdowns are widely perceived as unfair by shuttered businesses because there has not been any clear indication that they are where COVID-19 transmission is taking place.
“We haven't seen concrete evidence or data that show retail businesses in general are causing the spread of COVID — this includes both small retailers and large ones,” she said.
Drigola noted that some Canadian jurisdictions, such as Manitoba, have tried to balance the impact on businesses by only allowing big-box stores to sell essential goods.
But while some have been critical of the lack of hard information about where the virus is spreading, Ryan Imgrund, a teacher and biostatistician who posts daily charts and tables tracking the spread of the virus in Canada, said international studies have shown “dwell time” — or how much time people spend outside their homes and congregating in places including stores — is a key factor.
All that's happened is they've just sent the retail dollars to other retailers ... and other jurisdictions that have open stores.
“Scientific studies out of the U.S. have linked department stores being open to an increase in the number of COVID-19 cases,” he said. “This is mainly due to the dwell time or the length of time an individual spends in the type of store.”
Imgrund added the studies have demonstrated that limiting capacity reduces cases.
A group of more than 40 major retailers told the government last week that they would be willing to operate at 25-per-cent capacity should they be allowed to open.
“Perhaps this is a more responsible middle ground,” he said.
Lawyers, meanwhile, questioned whether HBC'S action will move its way through the courts fast enough to have an impact, even on an expedited basis.
HBC'S lawyer said a hearing on the case is set for Thursday. But even if the case is heard in time, recent court rulings in Canada have favoured public health concerns over others, including business.
For example, an Ontario court in August restored a public health order limiting migrant workers to three per bunkhouse in Norfolk.
A farmer had initially appealed to the Health Services Appeal and Review Board and won, based on his argument that the limit was arbitrary and risked damaging his planting and harvesting arrangements.
But the court then overturned that decision, siding with the region's medical officer of health's order and finding that the health and welfare of “vulnerable” migrant workers should prevail.