Downtown St. John's businesses pay almost $2,700 for pedestrian mall patios, report says

A report from the Canadian Federation of Independent Business shows St. John's has the highest permit fees of Atlantic Canada's major cities, costing businesses nearly $2,700. (Jeremy Eaton/CBC)

The Canadian Federation of Independent Business says St. John's has the highest downtown patio permit cost of any major city in Atlantic Canada, and says fees need to be lowered to help businesses prosper.

A 2023 report from the federation says businesses looking to build a patio using a downtown parking space or sidewalk space will pay $2,690 in permits. By comparison, the Atlantic Canada average is $995 — and $650 if St. John's is excluded from the average.

The average cost in Toronto is $570 according to CFIB senior policy analyst Duncan Robertson.

"In St. John's particularly, that's quite a lot. It's higher than the Atlantic region. It's higher than Canada's largest city," Robertson told CBC Radio on Thursday. "If you use more than one parking spot … there could definitely be some increased costs there, too."

The City of St. John's charges $25 per square foot for a parking space, and $2.50 per square foot for the sidewalk. The city told CBC News in 2023 that most businesses use more than one parking space.

There are also other fees, like $50 for a one-year permit per parking space, along with a $300 discretionary use development fee and a $345 lease fee. Those fees need are paid every three years.

Robertson said the upfront cost can be a key factor in deciding whether or not to create a patio — which could also mean a loss in key revenue.

"Being able to use this as one of the levers to welcome more people into their business, expand their footprint, expand their seating, can really help a lot of small businesses really take advantage of that summer. Unfortunately, they are faced with that, you know, close to $2,700 cost right off the top," he said.

Robertson said the federation wants to see the city either waive or reduce what he called a "tax on summer," saying it weighs down businesses in the hospitality industry.

St. John's Mayor Danny Breen told CBC News the city is unsure of how the report gathered the cost of a permit at $2,690, but says costs are set to recover lost revenue from parking spaces rented by businesses. (Curtis Hicks/CBC)

Speaking with CBC News on Friday, St. John's Mayor Danny Breen questioned how the cost of a permit was determined in the report, saying the city was unable to reproduce the cost of $2,690 for a permit.

The report says cost was calculated using "each municipality's formula" measuring an average parking space at about 128 square feet. A CBC report from May 2023 measured a downtown St. John's parking space to be about 160 square feet.

Breen said the city charges the money to rent a parking spot or sidewalk to help recover revenue from the lost parking spaces.

"During the pedestrian mall, we would have parking spaces that are no longer being used. So we lose about $97,000 a year in revenue from those parking spaces. So we attempt to recover some of that by charging rental on those spaces," he said.

While Robertson agreed that cities need revenues, he said affordable patios allow local businesses to grow — which gets people out and spending in the downtown area.

Breen said it's all about finding a balance between subsidizing the downtown mall's operating costs while benefiting businesses in the area.

"We think that it's reasonable to recover the parking revenue that's lost, and additionally the taxpayers are supporting the downtown by covering the cost of operating."

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