The economic impact of the COVID-19 pandemic will not be evenly distributed across Canada. Particularly vulnerable are the cottage-country businesses that depend on tourists and seasonal residents from the big cities to break even each year. TVO.org is speaking with business owners and industry leaders in rural Ontario to assess the economic toll so far and discuss what more can be done. Today: Jim and Kim Krech, of Temagami Marine, a marina an hour north of North Bay.
Matt Gurney: Before we get into the impact of the pandemic, can you guys tell me what your marina would normally be doing at this time of year?
Jim Krech: Normally, this time of year, we are pre-servicing. We've still got ice on the lake, so we'd be doing our pre-servicing for all our customers that come north. We have a building where we store boats stacked three high, and we call it the rack. We'd take them out of the rack, clean them, put them in the water, and have them ready for them to go to the cottage when the owners arrive. Also, during this time of the year, we do a lot of service and maintenance around the marina itself. It's kind of our slow time, but time to get things done before the season.
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Gurney: And I'm guessing that, over the winter, from around November until maybe the beginning of April, you're at a very low ebb? What happens at a marina during the winter?
Jim: We're still open for sales. We sell boats, trailers, motors. But all of our people get laid off from just before Christmas — until, normally, first of March. But most of our business is 100 per cent seasonal. We don't sell or service Ski-Doos. So, yeah, over the winter, it's just some sales for marine equipment.
Gurney: When do you start getting busy? Normally, we think of cottage season starting around Victoria Day, the May 2-4 long weekend, but you'd be busy before that.
Jim: As soon as the ice is gone. Normally, that's around early May. We have some customers already this year, actually. Some customers of ours accessed their cottage while the ice was still frozen, travelling across the ice, before all this.
Kim Krech: They're in their seventies, and he's had a stroke, so when the virus hit, their doctor said that they should just stay where they are. So they've been doing that, and now you can't cross the ice. It's not thick enough for Ski-Doos, but there's enough that they can't boat. Come ice-out, we'll go rescue them, bring them back, and they'll get their boat and go back to their island.
Gurney: No better place to self-isolate than your own island, if you have supplies.
Jim: Absolutely. And, in our area, it's almost all islands. There's very little development on the mainland — most of it is protected from development. But we've got a huge lake with many islands. It's very isolated. People can travel from island to island if they want, and I'm sure they do, just to be social. But this area is very isolated.
Gurney: Let's move on to the impact of the pandemic. I've written a few columns in the National Post recently about the confusion being experienced by a lot of cottage owners. There's been some confusion expressed by business owners, as well, because some of them are clearly not an essential service, some of them are, and some of them are sometimes an essential service. I guess that includes you guys.
Kim: Yes. We knew right away that we'd be able to partially open. We service the local Ontario Provincial Police boat fleet — service, repairs, and fuel. So they rely on us. And there's also a nearby First Nations reserve that's water-access only, and we do some of their storage and servicing, as well — not all of it, but some. So we knew we'd be allowed to continue that. And some of the people live on islands here at full-time permanent residences. They just live there.
Gurney: To your knowledge, what are you allowed to do, and what are you not allowed to do?
Jim: Matt, this is the most confusing thing. We are not getting good information. Right now, as an essential service, we can provide service and deliveries to permanent residents with lakefront addresses and to emergency services. But there's so much more we could be doing to try and keep us ahead and afloat, but if we do it, are we going to get in trouble?
Kim: We've had meetings with our municipality, we've talked to our lawyer — it has not been easy to get any clarity. Consider this: we have storage contracts for people. Those are seasonal. They'll run from October 31 to April 30, for example. The people have paid their money, and we are entrusted with their boats. What happens on May 1? These people don't owe me any more money. It's their property. If they want it, how can I legally not let them have it? I don't have a contract with them anymore. I have to give them their property back. The emergency decrees apparently override that, but it's not clear to us or our customers.
Gurney: Kim, just a minute ago you mentioned the full-time residents you’re allowed to provide services to. Was there any confusion about those people, or was it explicitly clear that you could provide services to full-timers?
Kim: We've been confused since the beginning. When this started, we had a staff meeting and agreed that everyone would go home while we tried to figure this out. We all self-isolated for two weeks, and everyone was healthy, so we came back, hoping things would be clearer. But when we came back to work, we still weren't sure what we were allowed to do. It's been really challenging to get good, clear answers.
Gurney: You mentioned that you service a lot of islands, and I'm wondering how essential that is — what percentage, roughly, of your customers are water-access only? How many would be cut off without a marina, versus inconvenienced without one?
Jim: All? Yeah. Basically all of them rely on us.
Gurney: Really? I knew it would be a lot, but that surprises me.
Kim: I want to say 100 per cent, but I know it's probably not. So I'll say 95 per cent — 95 per cent of our customers are water-access only for their properties. Since development on the mainland is so restricted, yeah, there's a few road-access places people can drive to, but, yeah, 95 per cent is water-access only. Probably more. And 40 per cent of those come up from the Greater Toronto Area.
Gurney: How many people are year-rounders, you think? Using Ski-Doos in the winter and boats in the summer to access their permanent residences?
Kim: Not a lot. We have hundreds of customers, and I'd guess maybe 20 are year-round. But there's some, for sure.
Jim: Yeah, we have 400 boats, and I agree. Maybe 20 year-round.
Gurney: About 5 per cent, roughly, then, would be reliant on you guys for the necessities of life.
Kim: And the emergency services, too. They depend on us.
Jim: [laughs] A few years ago, we were ordered to evacuate because of a forest fire. We refused and said this place is our life, so we're staying. And the officer drove off, and it was a good thing we did stay. A few minutes later, three OPP boats showed up needing fuel from us so they could do the emergency work they needed to.
Gurney: So some of the business is absolutely essential, but some of it is also people who have primary residences elsewhere.
Jim: Yeah. We're getting a lot of calls from people who want to come up. They'd come up and stay the whole summer and be isolated on their island.
Gurney: And that's where we start to get into the concerns of local people worried about people from the cities driving up and bringing COVID-19 with them.
Kim: Yeah, but here's the thing. We never see 85 per cent of our customers. We're here at the marina all the time, but 85 per cent drive up, park their car in the parking lot, load the supplies onto their boat, and motor off. When they come back, they dock their boat, get into their cars, and drive off again. It's a very isolated area, and people like it for that reason. We have no concerns about physical distancing here. What little interaction we'd need to have we could easily manage.
Gurney: Let me throw another hard-to-answer question at you. When someone comes up, parks the car, and motors off in their boat, how long until they come back? A lot of cottages, you just drive to. Easy peasy, right? You can go overnight if you don't mind the drive. But, you guys, you're five hours from Toronto. You drive the five hours, you get into a boat, you motor it to your island — that's a hell of a commute. So I'm guessing most of them, when they come, they plan to stay for a while.
Kim: [laughs] We have one lady who drives up every weekend from Toronto. She comes up Friday night and leaves Sunday night, every weekend. But you're right. I'd say most people would stay for a solid month, at least, once they get here. Some would stay for weeks, and maybe half would stay the entire season — the whole summer.
Jim: Or longer! We still have people leaving to return to the city as late as Thanksgiving.
Gurney: A big issue some rural communities has flagged is not having enough infrastructure to support the usual summer-time influx, especially since the pandemic has disrupted supply chains everywhere. It's hard to find certain foods, even in the big Toronto stores. So, for the people who spend a long time on their islands, what do they do for shopping?
Kim: They usually bring enough for a week or two — all that they need. If they need more, they bring their boats into dock, get into their cars, and they can go shopping in North Bay, about an hour south of us, or some other cities in the area. There's more than enough supplies for them. There's a seasonal grocery store nearby for some essentials, too.
Gurney: So this is all the context for your normal business and what's happening now. Guys, I hope it's not too prying a question, but, so far, what has this meant for your business?
Kim: We're down 86 per cent from what we did at this time last year.
Gurney: I'm actually speechless. I knew it would be bad, but that bad, so soon?
Kim: I just did the numbers a few days ago. I wanted to see if we'd be able to apply for the wage subsidy. We're down 86 per cent and probably more now. Every week that goes by, when things would normally be getting busy, that we can't operate normally is more damage done. A month from now, we'll have lost our whole year. Our marina is 62 years old. It's been here forever. The seasonal businesses rely on income from the summer to get them through the winter. And that's not going to be there. So it's going to be November when it hits the small seasonal businesses.
Gurney: Realistically, what can you guys do? You're obviously alert to the danger, so what can be done? What have you already done?
Kim: We're going to get through this summer by doing what every other seasonal business is going to do. We're just going to do everything we can. We'll service what we're able to, and we're trying to sell online. We'll make it. We'll be here next year — it's just going to be a lot tougher, and we may have to lay off our staff earlier.
Jim: And get by with fewer people altogether.
Kim: We've been through this before — not a pandemic, of course, but big slowdowns. We went through the ’80s recession and the collapse in 2008, so we know what to do. But it's going to be trickier this time. I don't think there's going to be a quick recovery after this.
Gurney: Let me ask you a question about a way forward. What do you think would be reasonable? What rules would be a good balance of safety and letting you guys earn a living?
Kim: I'm glad you asked. Our son's wife is a personal-support worker in a nursing home. Our daughter is a nurse in a hospital. Another daughter and her husband are paramedics in Hamilton and Toronto. They are scared and nervous. We don't think the virus isn't a problem. Our nurse daughter came to visit us and stood outside. She wouldn't come close to us. We know this is real. But people also need to be able to move safely. We can't be cooped up forever waiting for a vaccine. People will start moving, even if they're not supposed to. That would be bad. We know that. So we need realistic and clear rules. I understand the government was caught off guard at first and had to scramble. But it's time to take on some of these issues. People will start moving whether we want them to or not, so let's have clear rules so they can do that safely.
This interview has been condensed and edited for length and clarity.
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