Global recession hits people in East Scarborough

Empty parking lots speak a thousand words for small business owners in the community.

For residents, so do “For sale” signs which are now buried in the snow, overlooked like an old book collecting dust on a shelf. Since the recession has taken root in the global economy, this community in particular is beginning to see its effects.

As the unemployment rate continues to rise, it has sparked a chain reaction for privately owned local businesses like that of Jose De Leon. De Leon hears complaints from many of his customers who have lost their jobs. This has had a real impact on De Leon who owns and runs Joe’s Pizza and Wings on Morningside Ave. and Sewells Rd. with his wife.

“Business is not good…My regular customers used to come in three or four times a week, and buy three pizzas. Now they might come in once if at all, and only buy one pizza,” said De Leon. “One of my customers was laid off from his job after 30 years working there. They cannot afford to buy as much as before.”

After moving to Canada 13 years ago from Guatemala, De Leon took over 2-4-1 Pizza when they went bankrupt. He then took out a loan to open his own pizza place, and eight years later, he is struggling to make ends meet.

Unable to hire anyone, De Leon said he tries to cut costs by using one light and one oven which is difficult, especially if they get busy as those types of ovens can take up to an hour to heat up. If the government were to help him hire someone, De Leon feels his business could improve by giving him time to do other things.

“They are focusing too much on big businesses,” he said, referring to large company bailouts. “They forget about the small business being affected. Why not think about them?”

Saving the small businesses makes more sense to De Leon because there are more jobs to be had, he said.

“If they think about it, they have thousands of small businesses. So why bail out big auto companies, if no one can even afford to buy a car right now?”

In an effort to avoid considering the alternative, De Leon remains optimistic for the future of Joe’s Pizza and Wings. His tired expression clearly shows he is unable to make time for anything else, as running the restaurant consumes all of his time. Like many private business owners in the area, De Leon depends on the survival of his store.

“If we go bankrupt, I don’t know what we will do,” he said.

In light of the current state of the economy, it’s no surprise the areas of E8 to E11 (as shown on the map) from the east Scarborough area have seen an impact on the real estate scale. The zones’ year-to-date figures published in the December 2008 edition of Market Watch reported only 46 per cent of property which was listed actually sold. This is a nearly 10 per cent decline from sales in 2007 which the Toronto Real Estate Board called “the best year ever.”

With the province’s unemployment rate hitting 7.2 per cent in December according to Statistics Canada, it is no wonder confidence in the current market is dwindling.

In an interview with the National Post, Jason Mercer, senior manager of market analysis for the Toronto Real Estate Board, said it is this lack of security which is keeping prospective buyers at bay.

“We have definitely seen a real shift over the last year or so in economic conditions… You weren’t seeing as many people out there looking at purchasing a home,” said Mercer.

While these programs may help some businesses find an out, for others it may be too late to qualify. For those like De Leon who are waiting for government action, neighbourly support may be enough to help his and such small businesses stay afloat.

Between desperate business owners needing to hire, and eager job seekers needing to be hired, employers can explore the City of Toronto’s Employment and Social Services program. The program offers financial incentives for hiring a person that receives Ontario Works benefits. The YMCA also works with employers through their Targeted Wage Subsidy program. If eligible, they will help finance the employer’s cost of hiring by giving out as much as a 60 per cent wage subsidy.

Local business support means keeping money within home base. Since these businesses are invested in our community, their success reflects positively in the community’s economy. It doesn’t take much – in fact, De Leon proves that a couple pizzas can make all the difference.

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Posted: Feb 3 2009 12:31 pm
Filed under: Features