Toronto city council has approved a phased approach to implement fees for its CafeTO program after several businesses voiced concerns that the hefty new cost would discourage many from taking part.

Mayor John Tory introduced a motion during Tuesday's council meeting that would see all permit and application fees for the program staggered over three years.

City staff recommended last month to reinstate a one-time application fee of $865 on top of the annual permit fee. According to city staff, that fee will run at around $1,449 for the average sidewalk cafe and about $3,077 for the average curbside cafe.

Following criticism from local businesses about the new fees, Tory asked staff during last week's executive committee meeting to report back with options around the fee schedule. In a Feb. 6 supplementary report, staff recommended fees be phased over two years, starting with 50 per cent of the full amount this year.

But, with the mayor's motion, which councillors voted 23-2 in favour, CafeTO fees will instead be reduced by 66 per cent this year. This means businesses will only have to pay a one-time application fee of $285. Meanwhile, permit fees will be $14.56 per square metre for sidewalk patios and $43.70 per square metre for curb lane patios.

Next year, the fees will increase by two-thirds before the full amount initially recommended by city staff will be implemented in 2025.

"We, reflecting the concerns of those stakeholders and others, have decided to go a bit slower on it," Tory said as he presented the motion.

"I think our obligation is to make sure we maintain the jobs, strengthen the businesses, keep the look and feel of the city in its improved state. And that's something that I think this will accomplish."

The city said the fees, which were waived by council in the past three years to help businesses impacted by COVID-19 restrictions, are intended "to encourage co-investment with the city in the program from restaurant and bar owners while supporting the viability of the cafés in curb lanes and on sidewalks."

Besides the fees, a slew of changes to CafeTO was also approved on Tuesday aimed at advancing the program's transition from a temporary pandemic initiative to a sustainable and permanent one that will transform city streets.

They include requiring participating businesses to install temporary platforms in curb lane cafe permit areas to ensure they are fully accessible. Council approved a transition period, giving restaurants and bars until Aug. 1 to install the platforms.

"The CaféTO program is a success story for our city and I am thrilled to see how it is evolving and improving as permanent program," Tory said in a statement.

"The changes approved today will ensure that patio installations are beautiful, active and accessible, while also providing a much-needed grace period for businesses as we work together to transition into a permanent and sustainable program that can be enjoyed by all for years to come."

The CaféTO program was originally created to help restaurants and bars struggling to stay afloat during the COVID-19 pandemic by allowing them to use sidewalks and curb space for outdoor seating while indoor dining was prohibited.

About 801 businesses took part in the first year, growing to 1,327 in 2022.

- with files from Joshua Freeman