Downtown Toronto’s worker foot traffic is still down significantly compared to pre-pandemic levels due to increased remote and hybrid work.

With other major Canadian cities seeing a similar trend, questions are being raised about the future of labour in the country’s downtown cores.

This according to a new study by the Canadian Chamber of Commerce that analyzed how Canada’s workplace mobility has changed due to the pandemic.

The study found that worker foot traffic in the downtown cores of many of Canada’s biggest cities has been slow to recover, however many small and medium sized cities have seen an increase compared to pre-pandemic levels.

Toronto’s downtown worker traffic is down by 46 per cent compared to Jan. 2020, while Vancouver’s is down by 48 per cent and Ottawa’s is down by 44 per cent, according to the study.

Meanwhile the study showed that smaller cities in Ontario have seen in increase in worker foot traffic compared to 2020. Barrie’s is up by 29 per cent, while Brantford has seen a 39 per cent increase.

The study says that the pandemic triggered a “hollowing out” of the in-person workforce in large downtown cores, while outlying areas have continued to grow as more workers embrace a remote working model.

“As a result of the pandemic, the traditional ‘hubs’ appear to be shrinking, while outlying ‘spokes’ are growing. This is consistent with migration away from the downtowns of Canada’s largest cities in favor of less densely-populated areas (often within a two-hour commute of the largest cities), which is being led by knowledge workers embracing remote work,” the study says.

“Such changes in the location of work have profoundly impacted local real estate markets, both increasing demand for residential properties outside of the largest cities early in the pandemic, and potentially reducing demand for office spaces downtown.”

The study identified a number of indicators that have been driving this shift since the pandemic began.

The return of in-person workers has generally been slower in locations with a higher share of workers with a university degree, a higher share of women and families with children and a higher share of people who take public transit to work, the study found.

The study says these trends present challenges for economic development in the downtowns of Canada’s largest cities such as Toronto, but also present new growth opportunities for the small and medium sized cities that more and more workers are moving to.

But Lindsay Broadhead, Senior VP, Communications & Public Affairs of the Toronto Region Board of Trade (BOT) says this data doesn’t tell the full story.

“Whether [workers are returning] to work or not, there's already an existing ability to stay within the [downtown] core. Tens of thousands if not hundreds of thousands of people are in the core already so the makeup of our city centre is quite different than others. We're supported by not only the residents but quite a robust tourist economy that's returned. Visitors are the first to come back, which will be followed by business travelers,” she said.

“There's a far more complex story underpinning this one and it's one of return, albeit a slower return, but the dynamic of the city itself is really important to understand.”

Despite worker traffic in downtown Toronto not yet returning to pre-pandemic levels, overall downtown pedestrian traffic is seeing signs of recovery.

Just last month, more than half a million people walked along Yonge Street in downtown Toronto on Thanksgiving weekend, marking a return to pre-pandemic pedestrian levels along the busy corridor.

And worker occupancy in downtown Toronto has been increasing month-over-month as pandemic restrictions have loosened.

The Strategic Regional Research Alliance (SRRA) releases a monthly occupancy index that tracks average weekly office attendance in downtown Toronto, calculated as a percentage of pre-pandemic occupancy.

As of Nov. 1, it was at 36 per cent, up from 20 per cent in April and less than 10 per cent in February.

“The data is beginning to show a slow and measured return to work in the office. Anecdotally, we are seeing companies who have a higher rate of in-office work claiming a productivity and competitive advantage. As new challenges emerge in the economy, employers will start to insist on more in-office work,” the SRRA says.

But many believe remote work, at least in some capacity, is here to stay, although Broadhead says remote work can only be facilitated in certain industries.

“The majority of metropolitan hubs like Toronto were populated by businesses that facilitated remote work. And Downtown Toronto actually thrived with industries like banking and insurance, whereas in comparison to something like a distribution zone like the Pearson [airport] area; those businesses were really frontline workers and they distributed our essential supply so those folks were at work and we needed them to stay at work,” she said.

Broadhead says downtown Toronto will need to get creative when it comes to attracting new types of industries that rely on in-person work to replace office workers who may have left the downtown for good.

“The kind of businesses that downtown Toronto is going to try to attract will be businesses that are dependent on in-person work. We know that Mayor Tory has said that there's going to be huge investments in the film and entertainment industry; that’s very much in-person and there’s no reason why it couldn’t happen here,” she said.

Broadhead says despite the drop in traditional office worker mobility to the downtown core, overall numbers will make a full recovery.

“Will we see the numbers of people returning to the downtown core at the same rate? 100 per cent, yes,” she said.

“Will it be those same workers, I would suggest probably not.”