A council committee has accepted a plan to base inner-city parking rates on how popular parking is on any given street.

The two-hour parking rates would also vary depending on the time of day.

The new Calgary Parking Authority system would see the most expensive on-street rates drop from $5 to $4.50 an hour, but go up by at least $0.25 in other places depending on how busy those zones are.

City officials say it's about being fair.

Maggie Schofield of the Calgary Downtown Association says she is pleased with the plan overall, but worried about how it will affect restaurants over the lunch hour.

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The change means the bigger the demand is for a parking spot on a particular street, the more it will cost. (CBC)

"People are already upset that they're coming in and spending a fairly good dollar on lunch because we have very high-standard restaurants in the downtown core and then they're paying an additional number of dollars to park as well, so we're a little concerned that there may be a negative impact on the restaurants," she said.

A cash grab, says alderman

The change means the bigger the demand is for a parking spot on a particular street, the more it will cost.

Ald. Andre Chabot thinks it could be a cash grab in disguise for the future as new areas are developed, such as the East Village.

"And there's no cap, there's no limit to how much it can be increased to, so we could end up with some areas that are charging exorbitant fees for parking ... and other places that are undersubscribed that are being subsidized," he said.

Rates will be reviewed annually and adjusted according to customer usage, according to city officials.

The new rate plan goes to city council next week and would take effect July 1 if approved.