Rethink proposed new CafeTO fees that are scaring off restaurateurs, Tory tells city staff

Mayor John Tory's powerful executive committee has sent a proposal to make the CafTO permanent back to city staff to help address the "sticker shock" restaurants who take part in the program say they're feeling.

Tory and the councillors on the committee asked staff to look at ways to provide relief to restaurateurs. Last week, the city announced it was recommending that the program become a permanent fixture onboulevards throughout the city, but that eaterieswould have to pay thousands of dollars to participate.

"There's a degree of, I guess, what I'll call sticker shock," Tory said of the staff proposal.

He said he and the committee want staff to "give us some options on some things we could do to perhaps implement this in a slightly more moderate way."

CafTO allows restaurants and bars to open expanded outdoor spaces on sidewalks and in curb lanes from spring to fall. It was introduced in 2020 as the COVID-19 pandemic led to restrictions on indoor dining.

The staff proposal follows a study funded by the city that estimated that CafTO generated more than $203 million in economic benefits in 2022, with more than 1,300 businesses taking part. A November 2022 citysurvey ofhundreds of restaurant owners andbusinesses adjacent to patios, as well as more than 7,000 members of the general public, found solid support for the program. Results of the survey are summarized in the report.

City proposes new charges to recoup program costs

The city has so far covered the costs of administering the program to the tune of more than $20 million. The new charges proposed by staff would recoup some of those costs and be harmonized with patio-related fees that predate the pandemic.

They would include a one-time $865 application fee, as well as an annual permit fee based on the size of an individual sidewalk or curb lane patio.

Staff calculated that restaurant operators would pay, on average, $1,449 in annual fees for a sidewalk patio or about $3,007 for a curb lane patio.

A number of restaurateurstold the committee the costs of the program are too much for many businessesto bear right now. If changes aren't made, many say they won'tparticipate.

Theexecutive director of the Toronto Association of Business Improvement Areas said restaurants around the city are still suffering from the effects of the pandemic. And the rising costs associated with inflation are adding to the problem, John Kiru said.

"We also recognize that at some point, that pay-to-play principle becomes a reality as we move towards permanency and the vibrant cafe culture inToronto," he said. "To that end, I submit that the report, however, as written, is too much too soon."

Kiru said restaurateurs would like to see the program phased-in over the next year, with "appropriate fees" starting in the 2024 cafe season.

Tracy Macgregor, the Ontario vice president ofRestaurants Canada, asked councillors to defer the changes for a year. Many restaurants didn't budget for the increased costs, have narrow margins because of low customer trafficand won't be able to participate as a result, she said.

"Restaurants need this program to help them on the road to recovery," she said. "Now's not the time to bring back fees and the proposed changes to the program."

Coun. Paula Fletcher, who represents Ward 14, Toronto-Danforth, said the city has to take the rising costs restaurants are facing into account.

"If it goes forward the way it is, over 60 per cent of those that participated last year will drop out," she said. "That's not really a good economic development plan for our city or main streets."

Coun. Brad Bradford, who represents Ward 19, Beaches-East York, said the program needs to strike the right balance between cost recovery for city taxpayers and continuing to encourage restaurants to take part.

"We have to be very thoughtful about how we roll this program out," he said. "I think there's opportunities to phase in some of those fees."

City staff will now report back for the Feb. 7 meeting of city council on possible changes to the CafTO program.