Tattered Loyalist flag
i.e. original Union Flag. They really should replace it, though at least it's not yet missing whole portions of it.
I notice that the proportions of this flag are close to, if not identical, to that of the original Union Flag of King James (I - England; VI - Scotland), where oftentimes, today, versions of the Loyalist flag have the modern-day Union Jack's proportions (which is the same as the current Canadian flag). But the blue is as dark as that in the contemporary Union Jack (which indeed, is common practice in the manufacture of original Union Flags today).
At a business centre, in Kingston, Ontario.