The Globe and Mail -- Report on Business; Published Tuesday, January 25, 2022

Canada’s funeral industry has seen revenue fall as pandemic spurs smaller, simpler ceremonies. Irene Galea

Sarah Reid and her father, Jim Reid, are photographed at James Reid Funeral Home in Kingston, Ont. When he retires, Jim plans to pass his business on to his daughter, who will become the company’s fifth-generation owner. Johnny C.Y. Lam/The Globe and Mail

Many funeral homes have seen sharp drops in revenue during the pandemic as restrictions on gatherings have forced Canadians to hold simpler memorial ceremonies for loved ones, a trend that has exacerbated longer-term financial challenges for the industry.

“With the restrictions on guest numbers, a lot of families have had these huge refunds, but the expenses are the same,” said Jim Reid, owner of the James Reid Funeral Home in Kingston.

Enforcing pandemic restrictions has taken an emotional toll on funeral-home workers, he added.

“All my career, I have tried to accommodate families however they wish. But now, I have to say to grandma, ‘Sorry, you cannot hug your granddaughter.’ It’s hard for everyone.”

Funeral homes are part of the bereavement sector, which also includes transfer services, cremation services and cemeteries. The sector was made up of about 2,000 businesses across the country as of 2020, of which 98.4 per cent employed fewer than 100 people, according to Statistics Canada.

The decline in income over the past two years was due partly to rising interest in cremation, which costs less than burial. The losses accelerated as large viewings were cancelled, reducing the need for expensive caskets, said Scott MacCoubrey, a funeral-home owner and president of the Ontario Funeral Service Association.

Some funeral homes, including the one Mr. MacCoubrey runs in Cobourg, Ont., began offering virtual receptions over Zoom for free during the pandemic. As a result, he estimates, some companies within the sector have lost about 30 per cent of their annual revenue.

In November, 2020, memorial services were deemed essential by Public Safety Canada. Since then, restrictions on funerals, including limits on the sizes of gatherings, have been in flux. This has resulted in constantly changing staffing needs for funeral-home owners, according to Nova Lee Hill-Scammell, chairperson of the Embalmers and Funeral Directors Board of Newfoundland and Labrador.

Funeral homes in Newfoundland, as in other provinces, have at some points had to hire extra staff to enforce government regulations. For example, it’s not unusual for a home to have several visitations happening at once, Ms. Hill-Scammell said, and somebody needs to be at each entrance to make a record of visitors’ names and contact information in case of an outbreak.

“It’s definitely had a financial impact felt across the province,” Ms. Hill-Scammell said. “So your services have dipped, but yet at the same time you require more staff to accommodate. That part has been challenging, and no doubt has had an effect on the bottom line.”

Meanwhile, the Canadian bereavement sector is being shaped by longer-term trends, including the consolidation of small family businesses by larger corporations.

Three of the five funeral homes in Kingston, which were all previously family-run, were recently purchased by a large umbrella company in Toronto, Mr. Reid said. While he plans to pass his business on to his daughter – who will become the company’s fifth-generation owner – not every family has an heir.

“It takes a lot of luck to get a son or daughter who has the passion for being in funeral service, combined with just enough business sense,” Mr. Reid said. “If the next generation doesn’t have the skill or the inclination, what’s the owner to do? There’s no option but to sell.”

James Reid Funeral Home was founded by Jim Reid's second great-grandfather in 1854. The Canadian bereavement sector has seen a trend of consolidation of small family businesses by larger corporations. Johnny C.Y. Lam/The Globe and Mail

Large companies – such as Toronto-based Arbor Memorial Inc. and U.S.-based Dignity Memorial, a brand under funeral-goods company Service Corp. International – own dozens of funeral homes across Canada and can increase business efficiency through economies of scale.

And some buyers have no interest in the bereavement business at all. Funeral homes in downtown locations often sit on generous plots of valuable real estate, making them attractive targets for redevelopment.

In small towns, the role of funeral director was becoming a part-time occupation even before the pandemic. Funeral-home operator Denning’s Ltd. maintains several facilities in Southwestern Ontario, but they remain empty and unstaffed until someone makes an appointment or books an event.

“Years ago, a small-town funeral home would have an owner who would be there essentially all the time. That’s just not feasible these days,” said fourth-generation Denning’s owner Bill Denning. “Yes, it’s been difficult and yes, there have been financial implications to our business, but there’s also been such amazing, amazing chances for us to serve families in ways that they find helpful and meaningful.”

He said the ability to meet virtually has been one of the positives that has emerged from the pandemic because it presents new ways for families to gather.

Mr. Denning recently planned an in-person funeral where the final person in the family’s receiving line was a relative from New Zealand, who greeted guests through a laptop computer. This sort of hybrid event, Mr. Denning said, was uncommon prior to the pandemic.

Despite the changes in the sector, interest in joining the profession has remained steady, according to Michelle Clark, a professor at Humber College’s funeral service education programs. More than 100 students enter the school’s two-year programs each year, and the number has not dropped during the pandemic. She attributed the continuing popularity to the deep sense of gratification that comes from helping others.

“When you are able to help a family realize that they will survive this … nothing feels better than that. No amount of money can ever compete.”

But compensation for funeral workers has been slow to keep up with the cost of living in some cities. Junior funeral directors with less than five years of experience are lucky to make $50,000 a year, Ms. Clark said. She pointed out that this is a challenge the sector needs to overcome, especially considering the role bereavement workers have played in ensuring the quick and compassionate removal of human remains from health care facilities during the pandemic.

“They were the ones still going out in the middle of the night and not getting any recognition for it,” she said. “I hope that a light will be shone on the fact they worked tirelessly to make sure that families’ needs were met.”