Small businesses say Toronto’s CafeTO program has too much red tape and that’s led to delays and lost revenue.Getty Images
Toronto has already enjoyed two months of patio season, but many business owners have decried lost revenue and confusing bureaucracy as the city’s CafeTO program struggles to keep up with demand.
“The patios are still starting to go up in Toronto. It’s been extremely slow this year,” says Jennifer Orenstein, a director for the Toronto Association of Business Improvement Areas (TABIA).
Ms. Orenstein, who also serves as the Leslieville BIA treasurer, says restaurants in her neighbourhood, such as Radical Road Brewing Co., have had their patio applications approved by CafeTO, only to be rejected by the traffic department. “It’s hard when you’ve got businesses relying on this whole entire project to make money,” she says, citing delays as costly. “There are too many parts of the municipal government that are involved in this one little program.”
A 2022 TABIA report says CafeTO delivered $203-million in economic benefits to Toronto last year. But businesses spent an average of $18,160 to set up their patio spaces and 43 per cent said more assistance from city staff was needed for the program to run smoothly.
This burden of red tape is felt across the country at every level of government. The Canadian Federation of Independent Businesses (CFIB) says small and medium-sized businesses collectively paid $38.8-billion in regulatory expenses in 2020, from taxes and licensing to training and safety measures. Of that amount, the CFIB report says businesses believe more than $10-billion could be cut without sacrificing the public interest. Businesses with fewer than five employees cited the highest cost per employee, at nearly $2,000 each.
In Vancouver, Brent Constantine has been trying to move the Little Mountain Gallery, a not-for-profit comedy theatre, to the Gastown neighbourhood for nearly two years after the building it previously occupied was being redeveloped.
“It’s a great location” he says. But “it’s been empty, more or less, while we wait for our development permit, our building permits, and then an occupancy permit. Then we had to get a liquor license for small spaces,” he explains.
As an urban planning major, he can appreciate the need to ensure safety – such as keeping up with fire regulations. But there are demands he is unable to meet. “An example is something like: what is your parking plan?” he says. “We’re in Gastown, downtown Vancouver, in a heritage building. We’re five minutes away from a Skytrain station. We are literally on the same block as a 650-spot parkade. We’re not going to be putting parking anywhere.”
Walley Wargolet, executive director of the Gastown Business Improvement Society, says the delays can be enough to put people out of business before they start. “There’s no question that every day that you’re having to pay rent without your door open, it hurts business,” Mr. Wargolet says. “Especially in an economic situation that we have today, where there’s so many headwinds that are going against business being successful. You cannot have red tape at city hall be another one of those headwinds.”
Unlike larger companies, Mr. Wargolet says small businesses “don’t have staff, lawyers or teams of people who can fight for them. These are individual people who are the CEO, the dishwasher, the chef. They wear so many hats that they don’t have the time to fight with city hall.” Mr. Constantine has had to meet “consultants that charge me $10,000 for each specific speciality that they have.”
He does admit the city, despite its issues, has come a long way. For example, until this year, Vancouver had more than 560 different categories of business licenses to apply for. That list has since been narrowed to around 80.
“I applaud the City of Vancouver because staff had multiple meetings with the Vancouver BIAs, asking: What are the pain points? What are you hearing from your members and people trying to open up businesses in your areas that are affecting them? What is slowing down the process?”
The CFIB’s 2023 provincial red tape report card highlights the importance of having formal spaces for feedback, and suggests offering a regular, recurring process for addressing regulatory issues. The report says 90 per cent of respondents said it was “very important” to have knowledgeable, helpful staff.
Mr. Wargolet says communication between staff and BIAs is essential to improving business conditions, but support also came at a council level. “What it comes down to is the importance of this council and the mayor recognizing the importance of small business as a driver – not only an economic driver, but also a vibrancy driver to our neighbourhoods,” he says.
In Toronto, five rejected CafeTO applications were overruled in a June 14 city council meeting. A city spokesperson says that, so far, 23 rejected patio applications have since been granted, and another 17 are being appealed.
City staff were directed to create a business model for the program “that’s led by a single city division to ensure a coordinated, efficient and effective delivery of the program going forward,” according to a council motion. A spokesperson says feedback for the program has been collected each year, adding that the application process for next year’s patio program will open in the fall.
Ms. Orenstein is grateful that councillor Paula Fletcher advocated for small businesses who needed CafeTO approvals with the proposed review. But she is still frustrated that the process got in the way of businesses growing and residents savouring their city.
“Everybody just wants a liveable city and enjoy themselves, right?” she says. “Unfortunately, we are in a city that has been taken over by construction and bureaucracy. Paperwork and red tape has led to a slow start to things, which makes business unfair.”