Laurent Neveu is passionate about food. But that passion is being tempered by sharply rising costs that threaten to drive him out of Victoria’s restaurant scene.

The Victoria restaurant owner is speaking out about the steep rent increases that have forced several restaurants out of business in recent months.

Neveu, owner of Joie French Cafe and Joie Grillades, told Victoria News that his two separate businesses, under separate contracts with different companies, have faced a 20 per cent increase in the lease and commercial space contracts since January 2024 within a span of three months of each other. He had a prior 10 per cent rent increase in March 2022.

"The cost of doing business is huge," he said. 

Neveu is not alone. Little Jumbo closed in October 2024 due to a , and Vancouver Island Brewing relocated citing a 35 per cent rent increase. Vancouver Island Brewing's general manager Thom Riley said they were told it was the market rate and they are "obligated to maximize return on investment," he said. 

Neveu's restaurant, Joie Grillades, a fine-dining French establishment currently ranks seventh among Victoria's top restaurants on TripAdvisor. However, he notes that the combined weight of the industry's pandemic struggles and rising costs – particularly rent – has become a heavy burden.

He has even kept his payroll staff down to one, compared to the 12 staff he had on the payroll pre-pandemic.

"To get back to the kind of net profit that I had before, it's going to take me another five to 10 years," he said.

Downtown business leaders call for action on property tax relief

In Neveu's case, property owners told him the rent jump was due to rising property taxes, which increased in 2024 by 7.93 per cent. Under a triple net contract, Neveu pays base rent plus property taxes, building insurance, and other operating expenses; essentially, assuming most of the risk. 

Costs could be even higher in 2025 with a proposed , though the city also announced it is .

This case is the "perfect example" that the city "has to recognize" that property taxes will be passed on to the tenants, said Jeff Bray, executive director of the Downtown Victoria Business Association (DVBA).

"Property taxes being increased at two times the rate of inflation doesn't make any sense for a restaurant that can't increase their prices three times. I know that the council has proposed looking at ways to reduce the rate that businesses pay in relation to residential (properties) and our message is that can't happen quick enough.

"The restaurant doesn't benefit from Crystal Garden, the restaurant doesn't benefit from the library, the restaurant doesn't get garbage collection but they're paying for all of it."

Affordability is a huge concern across the board for retailers in Canada, added Avery Bruenjes, director of regulatory affairs at Retail Council of Canada.

While sharp rent increases are not an isolated issue, Ian Tostenson, president and CEO of BC Restaurant and Foodservices Association (BCRFA), said he is hearing "about rent increases affecting a business's viability more frequently out of Victoria than other parts of B.C."

But citing Restaurants Canada, across-the-board restaurant bankruptcy is up 115 per cent over last year.

"I think ultimately what we could have an impact on is municipal taxes," he said. "It could be a tax break or it could be just slowing down the historical level of tax increases."

The impact of supply and demand

Both Tostenson and Bruenjes agreed that sharp rent increases are not always due to bad landlords as they have their increased expenses, too.

Pascal Courty, a professor of economics at UVic, said the growth of Victoria's downtown and soaring condo construction creates a higher value for space allowing landlords to charge higher rates.

"If they were really trying to exploit these restaurant owners, there would be vacancy ... what you have is supply and demand," he said.

"Either you change your business model, or you exit and somebody else will take over."

Statistically, it appears the Canadian real estate agents and brokers industry continues to do historically well. The industry hit a record high of $26.7 billion in operating revenue in 2021, according to Statistics Canada. Even when revenues declined by over 1/5th in 2022, the operating revenue was 34.5 per cent higher than before the COVID-10 pandemic in 2019. Though, commercial real estate transactions trended lower in major markets throughout most of 2023, Statistics Canada said. 

From Neveu's perspective, he wishes there was more room for discussion. "It's a business relationship, it's not a human relationship," he said. "Some owners are very good and they try to help as much and as long as they can. I don't have that luck," he said.

"I'm not sure what I can do except transmit my disappointment."