A bar owner and a local business improvement area are taking aim at the City of Toronto for denying curbside café permits to small business owners who participated in the city's CaféTO program in previous years.

CaféTO allows restaurants and bars to expand their outdoor dining space through sidewalk cafés, curb lane cafés or patios on private property. Tomas Morana says he was one of hundreds of participants who signed up for the program this year, just like he did previously.

But this time around, the application was rejected, Morana said. In its decision, the city says the bar, Bar Volo near Yonge Street and Wellsley Street West, isn't located on an eligible road and blocks alternate parking — issues Morana says were never flagged in previous years.

"It's a substantial loss," Morana told CBC Radio's Metro Morning. He says he was told Tuesday by his local councillor that an appeal of the decision was rejected.

"We grew a whole new part of our business with this opportunity for two to three years. We gained more regulars, more people were coming by to check us out, and then all of a sudden now we don't have this and we have to explain to all our customers why."

After three years as a temporary program to help small businesses weather the COVID-19 pandemic, the city has now made CaféTO permanent. However, the change comes with tweaks to its permit requirements that may impact previous permit holders — something that Deputy Mayor Jennifer McKelvie says is necessary to "improve safety and accessibility."

"This is important because we have to be diligent in how we use public space for profit," said McKelvie on Wednesday, noting ramps must be accessible and emergency vehicles must be able to navigate around the curbside patios.

In a news release, the city said staff are now required to conduct detailed reviews of curb lane café applications with input from multiple departments, such as emergency services and the TTC.

But Morana said he was hoping for more leeway and flexibility from the city, which he says offered no suggestions or solutions to the problem. Now, he says the bar is on the hook for thousands of dollars they spent on patio furniture that can't be used, while residents have one less patio to go to this summer.

"It's unfortunate because it really brings ... great culture and community to our city," said Morana.

Meg Marshall, community manager for the Ossington BIA, says there's been "friction" between business owners and the city ever since the program became permanent and the permit process changed. Previously, she said, there was "flexibility" under the emergency act that Toronto was placed under at the start of the pandemic, alongside the original, temporary nature of the program.

The extra scrutiny has caused delays in both approvals and rejections, which not only shortens patio season but leaves businesses in limbo when it comes to planning and staffing for this summer, she said.

"It's really frustrating for everybody," said Marshall.

Marshall says she hopes this "frustrating" transition period will pay off next year, especially since the program has brought an economic boost to various businesses across the city. The city says this year's process will "enable quicker permit renewals in future years."

"We're putting in all the hard work, frustration, tears, sweat, all of that now, so that next year when people go to renew their applications, it's just like renewing your driver's license."

Harsh Chawla, owner of Pukka, says he signed on to CaféTO since its inception. He recalls permits being approved "instantaneously" in previous years compared to this season's "tedious" process.

He says his permit arrived after late May's good weather. Despite lost revenue, he says he understands the city's rationale for being extra careful with permits this time around.

"[The] added delay does add a lot of stress, especially after the pandemic," said Chawla. "But at the same time, what we have now, we're going to look forward to for the rest of the ... summer."

The city says it received more than 500 applications for the program. Barbara Gray, the general manager of transportation services, says it's issued almost 350 permits and is in the process of installing traffic safety equipment for the remaining areas.

Gray says city crews are trying to resolve some of the issues raised by those who were denied permits.

"We tried to be quite permissive because we understood ... the restaurant industry is still in recovery," said Gray.

But now that city traffic has "effectively" returned to normal, she says the city needs to prioritize safety and balance the needs of other businesses that might need to take away curbside space for parking load zones and taxi stands.

"Toronto has an incredible patio culture and it can always get better," said Gray. "We're on board for helping to support that."

"I'm hopeful that the number of cafés that we don't have solutions for is going to be pretty, pretty small."