Associate Health Minister Dipika Damerla said regulations will also be amended to ban the sale of tobacco on college and university campuses.
The changes to the Smoke Free Ontario Act will replace a patchwork of municipal regulations governing smoking on restaurant and bar patios, and will not hurt their businesses, she added.
"When we first introduced a ban on smoking inside restaurants and bars, there was a lot of concern raised that it would throw restaurants and bars out of business, but the evidence shows that did not happen," said Damerla.
"So we are very confident that there will be no adverse affects on restaurants and bars as we ban smoking on their patios."
However, the Ontario Restaurant, Hotel and Motel Association said many of its members went out of business because of the original smoking ban while others are still struggling, and called the expanded ban to patios "unfair."
Association president and CEO Tony Elenis said until smoking itself is outlawed, business owners should be allowed to decide if they want to allow smoking on their patio or not instead of facing a total ban through regulation.
"It's a choice the customer can make whether to go to a patio with smoking or not," said Elenis. "Of course that impacts the decision of the business owner and it should be his decision, based on the decisions of his customers."
The Progressive Conservatives support the changes, but wonder why the government didn't address the problem of contraband tobacco, which is often sold near colleges and universities at a fraction of the $85 retail price for a carton of cigarettes.
"It doesn't address the fact that students can buy 200 cigarettes in a baggie for $8," said PC health critic Christine Elliott. "There's a lot more that needs to be done and I would really call on the government to start taking action on that front as well."
New Democrat France Gelinas fumed that the Liberals did not announce plans to reintroduce legislation that would extend a prohibition on sales of candy and fruit-flavoured tobacco products to youth to a total sales ban.
"They know that this is how kids start to smoke in 2014, through flavoured tobacco that is marketed, priced, packaged and targeted especially for them," said Gelinas. "And the Liberals are sitting there idle."
Gelinas accused the Liberals of caving in to big tobacco companies.
The Liberals said they would be proceeding with legislation to ban flavoured tobacco products at a later, unspecified date.
Anti-smoking activists applauded the government's move to expand the ban to all restaurant and bar patios instead of leaving it up to municipalities.
"Now the province steps in and levels the playing field, which businesses always told us was very important," said Michael Perley of the Ontario Coalition for Action on Tobacco. "Now these patio rules will apply to all restaurants and bars, everywhere in Ontario, without exception."
The Canadian Cancer Society also welcomed the regulation changes aimed at lowering smoking rates.
"Banning the sale of tobacco on post-secondary campuses sends a clear message to the tobacco industry that we will no longer tolerate the industry doing business with our young people," said spokeswoman Rowena Pinto.
Statistics show tobacco claims 13,000 lives in Ontario each year and costs the province's health-care system an estimated $2.2 billion in direct costs and another $5.3 billion in indirect costs such as lost productivity.
The smoking rate in Ontario was 18.1 per cent in 2013, down from 24.5 per cent at the turn of the century.
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