The catalogue, a source of goods and entertainment for Canadians for decades, was discontinued in 1976, and 9,000 people were out of work. The company opened a chain of discount stores in the early 70s, but the effort was defunct by 1978. Downtowns began to hollow out, and in a replay of American trends . . .

In the 1970s and 1980s, through the provincial government's Ontario Downtown Renewal Programme, Eaton's was a partner in the development of downtown malls in smaller cities, intended to foster the revitalization of urban cores. As the chain formed the anchor of many of these shopping centres, these often carried the "Eaton Centre" name. Nearly all these malls — in cities such as Sarnia, Brantford, Guelph and Peterborough — had high vacancy rates and poor patronage, and contributed to the store's financial problems.

Wikipedia also notes:

Eaton's difficulties were not all caused by external forces. Poor management by the last two generations of Eaton family members to run the chain contributed to the demise of Eaton's. Stores that once served as landmarks in their communities were not renovated. New Eaton's stores built since the 1960s were largely indistinguishable from other chain stores, further reducing Eaton's status as a destination store.

The end of the catalogue and of the Eaton's Santa Claus parades, though being cost-saving measures, ensured Eaton's no longer held the same place in Canadians' hearts.

No "citation needed" there, apparently. They cut back on staff. They cut back on the quality of goods. They eliminated sales and went for a one-price-all-the-time strategy. They went from 60% of the market to 10%. It filed for bankruptcy in 1997, closed some stores, and declared super-ultra bankruptcy two years later.

As for the building:

When the store was emptied in late 1999, various alternative uses for the building (including residential condominiums) were considered, and ultimately all rejected. After a highly emotional civic debate, which included a "group hug" of the "Big Store" by hundreds of people in 2001, the store was demolished in 2002 to make way for a hockey arena, the MTS Centre. In one concession to history, red bricks were incorporated into the design of the arena façade, evoking the memory of the Eaton’s store that had once graced Portage Avenue.

Oh, yes, by all means, save the bricks.