Toronto City Council has taken it upon itself to put an end to the revitalization of Queen West and the booming restaurant scene that has sprung up in recent years, writes Brady Yauch.

The booming restaurant scene in Toronto’s west end has left a bad taste in the mouths of city councillors. Last week, city hall passed a by-law limiting the number of new restaurants that could open on a particularly trendy area on Queen Street between Dufferin and Roncesvalles.

That’s just the tip of the iceberg. The new law also prohibits the construction of backyard patios and any new restaurants operating on the second floor (or higher) of a building, and limits the overall size of the (now limited number of) new restaurants that decide to move into the neighbourhood.

So what’s the fuss all about?

City Hall, led by the area’s councillor, Gord Perks, says an increase in the number of new bars and restaurants moving into the area has resulted in an increase in noise, garbage and congestion. Officials even took aim at “patrons blocking sidewalks while waiting to get into establishments.” The city is also concerned that Queen Street West will no longer, in its words, “function as a main street which serves the widely varied daily needs of area residents.”

But the real problem here is bureaucrats getting in the way of a good thing and putting the brakes on a thriving business sector and growing contingent of small business owners that have been attracted by low rents and an influx of young residents – a trend that has revitalized a once down-and-out area of town. Officials are also now telling businesses already in the area how to operate. For example, the city took away the right of installing popular backyard patios, rather than allowing restaurant owners the option of an open dialogue with their neighbours about the use of outdoor space.

Officials are also putting themselves in the precarious position of picking winners and losers in both the restaurant industry and among landlords who may now have to settle for renting out their spaces for less than their true market value. In a report for the new by-laws, officials admitted that restaurants are often able to pay higher levels of rent – meaning landlords looking for a new tenant may now be forced to offer their spaces for what are no longer market rates. The city has yet to consider compensating these business owners for lost rent.

Worse still, city planners actually admit that an area once plagued by vacant store fronts and “undesirable activities related to drug use and crime” is now part of a booming culinary scene that nurtures small business owners and is cleaning up the area. Since 2008, 34 new restaurants have opened their doors on the stretch of Queen Street in Parkdale, according to researchers at city hall.

Officials would be wise to let the thriving restaurant scene flourish even more. For every dollar spent at a restaurant, another $1.85 of spending is created in the rest of the economy, according to the Canadian Restaurant and Foodservices Industry (CRFI). The group adds that every million dollars in restaurant sales creates 27 jobs. It’s also big business in Toronto. The more than 7,000 restaurants and bars in the city generate $5.1 billion in annual sales and employ more than 67,000 workers, according to data from CRFI.

And talk about bad PR, nearly all of the restaurants being targeted by officials are small businesses, capable of serving fewer than 220 people at a time, according to the city’s own calculations. Only four of the new restaurants and bars on the Queen Street strip can serve 440 people (the maximum allowed under previous regulations). And under the new rules, any landlord looking to rent out space larger than 200 square meters will no longer be able to offer her services to a restaurant, as the city halved the space allowed for dining establishments.

For those readers who have never ventured to the Parkdale strip of Queen Street West, I’ll allow the city to describe what you might experience:

Apparently that kind of behaviour and the business it attracts is no longer welcome in Toronto.

Brady Yauch is an economist and Executive Director of the Consumer Policy Institute (CPI). You can reach Brady by email at: bradyyauch (at) consumerpolicyinstitute.org