Government supports change for upcoming patio season

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FREEPIK.COM

With summer right around the corner, many operators have patio planning in full swing. During the pandemic, patio dining became a lifeline for many operators. Outdoor eating spaces, some housed in open-walled shelters with heaters — began to pop up all over the country, while restaurants with existing patio spaces extended them, re-creating their indoor-dining experience outside their four walls. Now, what started as a survival strategy when dining-rooms had to close has not only become a common way to dine, but an opportunity for operators to increase revenue. In fact, according to research by leading international restaurant and hospitality consulting firm VSAG (Vucurevich Simons Advisory Group), adding an outdoor patio can potentially increase restaurant gross profits by up to 65 per cent. The report claims that an investment of $200,000 in creating an outdoor dining space can potentially yield a gross profit of more then $500,000, with noticeable growth during the peak seasons for dining outdoors.

“Overall, we also found that with a robust strategic management plan in place, there is great potential for a hearty profit return on investment,” reads the report. “By looking at the space/layout options you can envision transformation of a designated area into an oasis for guests, while help to boost sales and increase your business’s outdoor dining visibility and exposure.”

By the Book
While many cities and towns offered a number of support measures during COVID-19 for those restaurants wanting to add patios, post-pandemic, that support has fizzled in some parts of the country. Here is a breakdown of the patio landscape in some of Canada’s city centres to help you get your outdoor dining space up and running.

Ottawa
During COVID, restaurants in the nation’s capital were given a break on permit fees, but this summer operators will once again need to pay the city to use the space, albeit at a 50-per-cent discount.

In a statement to CTV News Ottawa, Mark Young, the city’s program manager of public realm and urban design, said the city is taking a “phased-in approach” to right of way patio and café seating fees after they were waived from 2020 to 2022, adding “the council-approved decision to re-instate fees at a 50-per-cent rate for the upcoming summer and winter patio seasons is intended to mitigate growing costs to businesses and continued economic instability, particularly in the downtown core.”

And while patio operators that wanted to have their permit by April 1 needed to submit their applications by March 17, there is no deadline for these applications as the City reviews and issues patio permits year-round.

A draft bylaw currently under discussion could make changes made to help restaurants during the COVID-19 pandemic permanent. This includes allowing patios on sidewalks, on-street parking spaces and roadways to stay open until 2 a.m.

Toronto
In February, The City of Toronto made its CaféTO program permanent and introduced new amendments that offer a phased-in approach to the program’s participation fees.

When the city originally proposed changes to CaféTO, the amendments were met with concern by Restaurants Canada, BIAs and other stakeholders, as they failed to recognize the state of the foodservice sector. While most expected 2022 to welcome a rebound, restaurants struggled with crushing debt, labour shortages, supply-chain challenges and inflation. Together, these issues resulted in 50 per cent of restaurants currently operating at a loss or just breaking even and 54 per cent of foodservice operators in Ontario seeing 2022 bring a lower financial performance than that of 2021.

Restaurants Canada, as well as other organizations including the Toronto Association of Business Improvement Areas (TABIA), carried out a presentation before the executive committee on January 31, and the committee passed the mayor’s motion to provide options that address transition concerns for 2023. As a result, Toronto’s City Council adopted the recommendations made by Restaurants Canada to keep the CaféTo program affordable to lessen financial pressures on businesses and allow Toronto restaurants to keep re-building post-pandemic.

CaféTO’s fees have now been significantly reduced to approximately one-third of the program’s proposed amount, with plans to phase in additional fees by one-third year-over-year until 2025. In 2023, the program’s one-time application fee will cost $285, while permits will be set at $14.56 per square metre for sidewalk patios, and $43.70 per square metre for curb-lane patios. The fees will roughly double next year, and triple from 2023 levels by 2025.

But despite that good news, a report in the Toronto Star stated that fewer restaurants in the city will take part in the program this summer. In fact, only 500 restaurants had submitted applications as of April, down from last year’s total of 835 permits issued. This, the report says, is largely the result of the stringent permit requirements set out by the city, including comprehensive insurance coverage, approved site-plan drawings for patio and landscape design and an approved temporary accessible platform package.

For patios associated with restaurants and bars located on private property, The City of Toronto has enacted temporary-use zoning by-laws to permit larger outdoor patios than would otherwise be permitted and to allow outdoor patios in parking lots. These temporary use zoning bylaws will expire on Dec. 31, 2023.

Vancouver

On the west coast, restaurants, bar, brewery and winery owners have been given additional time to make outdoor seating areas permanent.

The B.C. government is extending its existing temporary expanded service area (TESA) authorizations until Dec. 31, 2024, allowing thousands of liquor-licensed businesses to create new or expanded outdoor seating spaces, such as patios and sampling areas.

“We know that many business owners who wanted to make their patios permanent have already done so,” says Mike Farnworth, Minister of Public Safety and Solicitor General. “This final extension will help those who were unable to complete the process in time, without disrupting people who want to enjoy our world-class food and beverages as the patio season approaches.”

The TESA program was implemented in May 2020 as a measure to help the food-and-beverage sector through difficult financial times during the COVID-19 pandemic. In June 2021, the Province extended existing TESA authorizations to provide time for local authorities to update their patio policies and for licensees to apply to make those areas permanent.

“Many licensees have not applied to make their TESA permanent due to the stress and pressure as a result of the effects of the pandemic and the unprecedented labour shortage,” says Ian Tostenson, president and CEO, BC Restaurant and Foodservices Association. “We would like to thank government for being conscious of this and providing the much-needed extension.”

Brenda Bailey, Minister of Jobs, Economic Development and Innovation, says: “Supporting small businesses to keep their doors open during the pandemic was a top priority for our government. Patio service for the hospitality sector proved to be a lifeline for many of those businesses, and the option to make those patios permanent recognizes a much-needed income generator that also contributes to more vibrant neighbourhoods and communities.”

Businesses wanting to make their current TESA permanent must apply through the Liquor and Cannabis Licensing Portal for a new outdoor patio permanent structural change (for indoor TESAs), or a new interior service area permanent structural change (for outdoor TESAs). Permanent approval of expanded service areas must meet all local bylaws and requirements (e.g., related to parking, building codes and the use of public land).

BY AMY BOSTOCK

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