New costs cast doubt on future of Toronto’s outdoor patios
Outdoor patios were a rare bright spot in Toronto in the depths of the pandemic, but, now, as the city looks to make its popular CaféTO program permanent, it will come with new costs and regulations for restaurants, leading some to wonder if it’s worth the investment.
Robert Lundy, owner of Shakey’s Bar and Grill on Bloor Street West, was able to almost double his seating space with a curb lane patio and hired more staff, keeping his business and the community afloat during tough months.
“It definitely brings the city alive,” he said. “But I don’t think it is going to survive after this season … I can’t spend $13,000 before I even start.”
After three years with no charges, city staff are recommending a one-time application fee of $865 in 2023, as well as an annual fee that would average about $1,500 for a sidewalk space and $3,000 for a curb lane space.
That curb lane fee is a steep decrease from the roughly $10,000 the city charged for a similar outdoor dining space in 2019, and the fees have also been equalized across the city so downtown areas no longer pay more.
But under the new rules, patios in a curb lane will also have to be built on a platform for accessibility, which the city found could cost on average $14,000 to build. Businesses would be able to get half those costs covered by a federal grant of up to $7,500 this year.
With the changes, the city is expecting close to 400 curb lane cafes (about half the number from previous years) and 500 sidewalk cafes, with permit fees bringing in more than $2.5 million. All the fees expected in 2023 would be enough to pay for about two-thirds of the cost of running CaféTO, with the city covering the rest, staff estimate.
“We’ve tried to be quite moderate with the fees,” said Barbara Gray, the city’s general manager of transportation services, who said a drop in applications is typical when new regulations are introduced.
The program brought in $203 million in “economic benefits” in 2022, according to the city.
As part of the transition to a permanent program, staff will spend the next two years figuring out how to balance patios with the needs of road users, including Wheel Trans buses, which have sometimes found it difficult to drop off passengers, and other businesses, the staff report says. Part of that could mean making turning some areas into destination dining districts, where street cafes line a few blocks.
However, the cumulative costs — including storage, furniture, fencing and decor — likely mean restaurants that participated in past years may not apply, and that there will be fewer willing to sign up for the first time.
“We really, really feel it’s very premature. We are not out of this pandemic yet,” said Angela MacDonald, executive director of the Bloor West Business Improvement Area, who said the accessibility ramps could have continued to be a stopgap solution.
“I think it is really tone-deaf,” said Albert Stortchak, board chair of the Broadview-Danforth BIA. “We have to find a middle ground here where it is affordable for restaurants to keep at it.”
The patios are popular, they bring in foot traffic to nearby retailers and for some neighbourhoods there is the opportunity to become dining destinations, the BIAs say. But rising food costs and high interest rates are adding pressure, especially for restaurants that haven’t bounced back and are still paying off loans.
“The restaurant industry right now is in turmoil,” said Tony Elenis, president of the Ontario Hotel and Motel Association, noting that the new costs will deter other parts of city where there has been almost no uptake, such as Scarborough, from engaging in the program. “There seems to be a disconnect … the food service industry is barely keeping the doors open.”
Restaurants also face uncertainty from construction projects and bike lane installations that could impact how long the patio space is usable this year or in future years.
“As a long-term investment, it’s terrible,” said Lundy. “I think the city is not interested in CaféTO anymore.”
Meg Marshall, manager of the Queen Street West and Ossington BIA, said there have been mixed reactions from her members. While permit costs were expected after three year of a free ride, the platform requirement will be a cost barrier even with the city providing templates for platforms, she said.
“People are going to have to really think seriously if they are going to take part,” she said, but the upside is that there will not be unused or poorly used space.
The city took down 100 patio spaces last year that were blocked off but not being used.
Coun. Dianne Saxe (Ward 11, University-Rosedale) predicted that the CaféTO program will “shrink, but not die” as a result of the proposed changes, which she described as fair.
“It’s reasonable if they are occupying public space they should be paying a fee for it,” she said.
“What I hear from businesses most often that they need from government is clarity and predictability. We didn’t have that in CaféTO up until now. Now we will,” she said.
JOIN THE CONVERSATION