Online retail and delivery are capturing headlines, and for good reason. In April 2025, gross e-commerce sales across Canada were $4.4 billion. But this amounts to only about 6.2% of total retail trade. In other words, physical retail sales in Canada still matter, especially in areas with higher population densities like the City of Ottawa.

How do we plan around this reality? How might we structure our cities to stimulate entrepreneurship? The City of Ottawa has a proposal on the table, in the form of a new draft zoning by-law—viewed by observers as the most significant zoning change the City has seen since it was amalgamated in 2001.

Most significantly, the City proposes to replace the existing “Residential” zones with six new “Neighbourhood” zones that would allow for more density and more flexibility to open convenience stores, pharmacies, and other small retail establishments in traditionally residential neighbourhoods. Special zoning categories for areas near transit hubs and major street corridors will allow for even more density and flexibility.

The proposed zoning regime is meant to encourage the development of 15-minute neighbourhoods, where local shops, services, and schools allow residents to “meet their daily or weekly needs within walking distance.”

The City’s proposals would also eliminate rules that now require the inclusion of a minimum number of parking spaces with new developments, and ban the construction of new surface parking lots in the downtown core. This would free up more space for pedestrians, which at least one study suggests is likely to have significant positive impacts on local business. For example, that study highlights how converting an underused parking area in Brooklyn, NY into pedestrian space was followed by a 172% increase in local retail sales.

Looking at the numbers, we can definitely begin to get a picture of how big of an impact these changes can have for physical businesses in Ottawa… for the better! More density and zoning flexibility could lead to many more new businesses popping up across Ottawa, offering a range of innovative products and services.

Without a doubt, navigating the new by-law’s requirements will be a complex endeavor for businesses and developers. Hopefully there is enough supply of local real estate law expertise to meet the resulting demand.

All in all, it’s clear that the proposed by-law would represent a tectonic shift in city planning that yields new opportunities for local entrepreneurs while also making neighbourhood life much more convenient. Assuming it’s implemented, I hope the City, the private sector, and the local legal profession will be able to manage the resulting transition.