CaféTO 2023: changes to outdoor dining program may affect small restaurants, East York voices say

Almost three years after its creation, changes to CaféTO could cost local restaurants

A Toronto citizen walks in front of the restaurant Off the Hook in East York. Doors closed and curtains down, with a big black sign receiving light from a sunny and yet cold day.
A passerby walks in front of a restaurant in East York, Feb. 3 2023. During the summer, Off the Hook uses the sidewalk for outdoor dining, part of Café TO, that runs since the pandemic. (Luis Felipe Mussalém/Toronto Observer). 

Toronto City Council approved on Feb. 7 the permanent stay of the popular CaféTO program, which includes new fees and regulations for participating restaurants.

Operators point out that the new costs and restrictions will make it harder for them to keep participating. The city said it will partially subsidize the fees for 2023.

“I would say it’s very upsetting,” said Amr Elimam, owner of Papyrus restaurant on Danforth Avenue. “There is a general lack of understanding and appreciation at several government levels of how tough things are for restaurants now.”

Toronto’s plan to promote outside dining spaces came in 2020, at a moment when it was the only option for diners and restaurants alike. CaféTO is a city initiative that was a pandemic-recovery measure to address provincial restrictions on indoor public activity.

CaféTO allows restaurants and cafés to use sidewalks and parts of bigger streets as a dining space for customers, mostly between May and September.

The program includes a one-time application fee of CAD $865, as well as permit fees. Staff estimated that food businesses would pay to the city a yearly average in total fees of $1,449 for sidewalk patios, and $3,007 for curb-lane patios, the CBC said.

The difference between the two is that curb-lane patios require the relocation of the public’s right of way.

The program generated CAD $203 million in revenue in 2022, according to city-generated data.

Gradual introduction of fees

The city said in a release it will reduce the permit and application fees by 66 per cent in 2023. The fees were waived from 2020 – 2022 by the city.

The fee reduction is a temporary decision, since the amounts will be phased in over the next three years, to be fully restored in 2025.

The Executive Director of the Danforth Business Improvement Area, Mary Fragedakis, said the one-time fee isn’t an issue, but the overall cost per establishment is. BIAs are responsible for coordinating contracts with the city, causes of liability, liquor licence regulations and also advocating for those spaces.

She said the amount of required fees might make the program less financially viable.

“It’s the combination, it’s the totality of the fees, restrictions and requirements,” said Fragedakis. “They [the restaurant owners] have to spend a lot of money upfront before they make any money back.” 

Based on a survey with its members, Restaurants Canada concluded in 2022 that 75 per cent of table-service restaurants were still in debt in September 2022 as a result of the COVID-19 crisis.

They also pointed out that the economic slowdown in 2023 will leave these operators with more challenges to face.

The concerns of restaurateurs

Fragedakis said many curb-lane cafés have to follow accessibility laws, implementing ramps that require an engineer’s seal, which in itself is another expense.

Council agreed to give restaurants until Aug. 1 to implement new temporary platforms, to ensure the spaces are “fully accessible.”

Fragedakis said these ramps and accessibility items can cost an average of CAD $2,000. The CaféTO Property Improvement program now offers CAD $1.5 million in support to operators for the installation of the platforms, the city said in a release.

Recovering from the pandemic

According to Fragedakis, many consumers of the food industry are also affected by inflation, which leads the ones that still dine out to do it less often, which is another challenge for restaurant owners.

Elimam is a participant in CaféTO since 2020. He said many restaurants depended on the program to keep the business alive.

Another restaurant owner said that since pandemic lockdowns were lifted, expenses have added up and many restaurants are still in debt.

“The pandemic is definitely not over for small businesses. We went from a pandemic right to inflation and having to pay back massive loans,” said Ginger Robertson, co-owner of the Off The Hook restaurant at Broadview Ave. “They are due this December, and I don’t know where the money is supposed to come from.”

The main challenges

According to the City of Toronto data, businesses that reported an “unlikely” status of returning to the CaféTO program in 2023 (around 12 per cent of the total) pointed out maintenance, staffing and vandalism as the reasons for their answer.

Source: Statistics Canada

The latest City’s report on the new plans for the program often mentions the goal providing regulations “to establish criteria for a safe, active, accessible and attractive permanent curb lane café program.”

Fragedakis said having separate bike lanes in Greektown helped patrons and patios stay safe.

“Safety wasn’t an issue here, but I could see it being in other parts of the city. In some neighbourhoods, it is a concern,” she said.

Culinary diversity among Greektown’s strengths

For Fragedakis, Greektown always had a strong patio culture, and the Café TO program emphasized that. The area is known for its culinary diversity.

“We obviously celebrate our Greek heritage, but you can travel the world in Greek Town … We have new eateries from everywhere, Italian, Mexican, Vietnamese, Caribbean and East African,” she said.

Elimam said many people want to enjoy the outside dining experience now for different reasons than in 2020.

“I think that when you create an area where people can sit out and eat and have a bunch of choices of restaurants makes the area look nicer and lively, a better summer atmosphere,” he said.

“The program intentions are very good, I just think they are switching some gears at the wrong time.”

Toronto’s patio season is set to start in May, depending on the weather.

About this article

Posted: Feb 8 2023 8:30 pm
Filed under: Business COVID-19 News Spotlight On Small Biz