The cost of a business licence to sell tobacco in Ottawa will double in 2016 if the city's draft budget, tabled Thursday, is approved next month.

A licence for tobacco vendors in 2015 cost $403. As part of a general increase in user fees under the city's bylaw department proposed in Ottawa's 2016 draft budget, that same licence would cost $806 next year.

At Di Rienzo Grocery & Deli in Ottawa's Little Italy, Paolo Di Rienzo isn't happy about the hike. "It's very bad," he said. "We keep the cigarettes just for our customers.

"I mean, we still have lots of stuff here to sell, so we keep the customers happy by selling the cigarettes. But if it goes $800, there's no way that we can keep the cigarettes. We have to take them out."

Strip clubs, body rubs

Tobacco vendors aren't the only businesses hit with a big increase in licensing fees in the 2016 draft budget. If the budget passes, licenses for adult entertainment parlours, or strip clubs, will also double, forcing owners to pay $6,570 instead of the $3,285 they paid in 2015.

Tobacco Vendor License Increase

A tobacco vendor license would cost $806 if the 2016 draft budget passes, up from $403 in 2015. (File)

And body rub parlours will pay $1,246 for a license, doubling the 2015 rate of $623.

After the 2016 draft budget was tabled Thursday, Mayor Jim Watson said the increase in user fees is not about generating revenue for the city.

"We're not allowed to use user fees as a revenue stream, they can only cover the costs," said Watson. "So if you look down the list, you'll see the vast majority are at two to 2.5 per cent. Some are significantly higher because of the cost involved of enforcing and maintaining bylaws."

'We're not allowed to use user fees as a revenue stream.'
- Ottawa Mayor Jim Watson

Di Rienzo doesn't buy that, but he concedes it's not worthwhile for him to keep selling cigarettes, and he believes the dilemma is even worse for smaller stores. "It is impossible for a small place that's sells just cigarettes to survive. They're going to eliminate all the small stores," he said.

Di Rienzo says he's going to take some time before deciding whether to pull tobacco from his shelves altogether.

"Before next month, I think I'm going to check it out and see what I'm going to do," he said. "But it's impossible for us to pay $800 just to license for selling cigarettes."