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REGULATING LIQUOR LICENSING IN ONTARIO

In Canada, each individual province and territory is responsible for the regulation of alcohol sales within their region. In Ontario, the Alcohol and Gaming Commission of Ontario is the regulatory body responsible for overseeing the enforcement of liquor licensing regulations in the province.

In Ontario, the sale and service of alcohol is strictly regulated by the Alcohol and Gaming Commission of Ontario, who are also responsible for the regulation of lottery, gaming, horse racing and the sale of cannabis within the province. As a provincial Crown agency, the AGCO reports directly to the Ministry of the Attorney General. The Commission is responsible for enforcing the Liquor License Act as well as certain sections of the Liquor Control Act. These two statutes form the basis of liquor licensing law in Ontario. Created in 1998 through the enactment of the Alcohol and Gaming Regulation and Public Protection Act, the Commission has also been regulating the horse racing industry in Ontario since 2016 and the recreational sale of marijuana since its legalization in October of 2018.

The Alcohol and Gaming Commission of Ontario is the sole regulatory body responsible for the granting of various types of liquor licenses to businesses and individuals all over Ontario. The Commission enforces liquor licensing regulations, including the time of day that alcohol may be sold, the types of businesses who may be granted liquor licenses, and the rules surrounding the service of alcohol in various business establishments.

Frequently Asked Questions

Who may Apply for a Liquor License?
Liquor Licensing Applications
-License to Sell and Serve
-License to Manufacture
-License to Ferment on Premises
Special Occasion Permits
Maintaining a Liquor License
Reasons for Termination of a Liquor License
The Complaint Process
Consequences of Having a Complaint Filed

Who may Apply for a Liquor License?

There are no restrictions laid out in the Liquor Control Act as to which types of businesses may apply for a liquor license. For the most part, the Alcohol and Gaming Commission of Ontario grants liquor licenses to businesses who regularly sell alcohol as part of their business plan. This generally includes bars, restaurants, clubs, lounges and certain event venues. The Commission regulates not only the sale and consumption of alcohol, but also regulates who is legally permitted to serve alcohol. Under the Liquor Licensing Act, anyone serving alcoholic beverages at any type of business, establishment or event must be over 19 years of age and must have their Smart Serve Certification, which is discussed more in depth below. In addition to establishments that may sell and service alcohol, the Commission also grants licenses to those businesses who manufacture alcohol including breweries and businesses that ferment on premises.

Liquor Licensing Applications

Before it is legal to sell, serve or manufacture alcohol, a business or establishment must be granted a liquor license by the Alcohol and Gaming Commission of Ontario. Selling, serving or manufacturing alcohol without such a license is illegal in the province of Ontario and can lead to serious consequences. The type of license that is needed will depend on the type of business that is being carried out.

License to Sell and Serve

Businesses such as restaurants, bars, lounges and clubs will require a liquor license before they can legally sell and serve alcohol to their patrons. Only those individuals who own the business or establishment may apply for a liquor license and licenses will not be issued to private residences (unless they are running a business out of their house such as a bed and breakfast). It is important to note that the business does not have to be primarily concerned with serving alcohol to be granted a liquor license, however once a license has been granted the licensee is committed to serving food and alcohol as part of their business. The application process generally takes 10-12 weeks but can take longer if they are submitted incomplete or with deficiencies.

The following must be included in each application; the application fee which will vary depending on the business and license required (it should be noted that all fees are non-refundable and applications will not be reviewed until the fee has been submitted in full), an Entity Disclosure which contains information regarding the applicable business, a Personal Disclosure which contains personal information about the business owner, any officers, directors, signing officers, presidents, secretary’s, treasurer, any individuals holding more than 10% equity in the business, any and all partners in the business and any on-site managers. Finally, the application will need to include floor plans of the premises for which the anticipated license will cover. All of these items must be submitted to the Alcohol and Gaming Commission of Ontario before the application will be reviewed.

In addition, the applicant must also submit a Municipal Information form which contains information regarding the business, an Agency Letter of Approval from the local fire department, building and health departments in the municipality in which the business is located. A calculation of the capacity of the area of the business which will be covered by the liquor license and a copy of the Master Business License of the business. These documents do not need to be submitted with the original application however applicants are advised to submit forthwith to avoid any delay in the application process.

License to Manufacture

In addition to licensing the sale and service of alcohol in Canada, the Alcohol and Gaming Commission of Ontario also issues licenses for the manufacture of beer, wine and spirits. These licenses allow owners, operators, representatives and representatives of foreign manufacturers to legally manufacture alcohol within Ontario. Additionally, the AGCO also issues licenses to wineries, breweries and distilleries who wish to sell their products on the premises by the glass. These licenses are called Manufacturer´s Limited Liquor Sales Licence also known as “by-the-glass” licenses. This particular license allows patrons of such an establishment to carry and consume alcohol in areas of the premises which are under the control of the manufacturer. It must be noted that alcohol may never be consumed in areas such as public roadways, parking lots or driveways or anywhere else that may cause a concern for public safety. Prior to being granted a license such an establishment would be required to get permission from their municipality.

License to Ferment on Premises

The Alcohol and Gaming Commission also provides licenses for business who wish to provide facilities with fermenting equipment, for use by the public called Ferment on Premises (FOP) licenses. This essentially means that members of the public may come to the fermentation facility to ferment or brew their own alcohol for personal use. It is very important to note that the facility may charge the customers for use of their equipment but cannot sell, keep for sale or distribute alcohol to customers.

Special Occasion Permits

Special Occasion Permits are liquor licenses temporarily issued for special events. These types of permits will generally last only a very short period of time (often just one day) and will allow licensees to sell and serve alcohol to guests during the duration of the event. Such licenses may be granted for public events, private events and events related to promotion of the liquor industry. Such a license will be required any time liquor is being served or sold at a location that does not already have a valid liquor license or is not a private place of residence such as a home.

The Alcohol and Gaming Commission of Ontario defines private events as any event where only guests who have been invited are welcome to attend. Private events cannot be advertised and the goal of such an event should not be to make money. A common example of a private event for the purposes of special occasion liquor licensing is a wedding. The AGCO defines a public event as events which may be advertised to the public and where the purpose of the event is to make money. Finally, the AGCO defines industry promotional events as events held by the manufacturers of alcohol with the intent to promote the product through sampling. The licensee may not sell alcohol at the event but may distribute it as samples.

Maintaining a Liquor License

Once the Alcohol and Gaming Commission of Ontario has issued a liquor license, the licensee must abide by all of the rules and regulations surrounding the sale and service of alcohol in Ontario to ensure their license remains in good standing. It should also be noted that liquor licenses must be renewed periodically. Failure to renew a license and pay the licensing fee on time will result in termination of the liquor license, which will subsequently terminate the establishment’s ability to legally sell alcohol. In addition, the Alcohol and Gaming Commission of Ontario will conduct regular inspections of the premises to ensure the liquor licensing rules are being abided by satisfactorily.

Reasons for Termination of a Liquor License

The Alcohol and Gaming Commission of Ontario reserves the right to terminate a liquor license it has issued in the event that the licensee has violated the terms of their license. There are many ways in which the terms of a liquor license may be violated. A licensee may violate the terms of their liquor license by; permitting drunkenness, violent and disorderly conduct, permitting overcrowding, selling liquor to individuals who are visibly intoxicated (including over service), permitting drugs on the premises, service outside of the prescribed hours, failure to clear signs of service, permitting illegal liquor on the premises, allowing removal of liquor from the premises, obstructing inspection of the premises, serving minors or those without proper government issued ID, and failure to post signage. Committing any of these violations will likely lead to very serious consequences including the loss of one’s liquor license. It should be noted that this list is not exhaustive.

The Complaint Process

Often times, the Alcohol and Gaming Commission of Ontario will become aware of violations to a liquor license through a complaint made by a member of the public. Any member of the general public may make a complaint to the AGCO against an establishment with a valid liquor license or a pending application for a liquor license. Formal objections to liquor license applications may also be filed directly with the AGCO.  The complainant may provide their personal contact information or may make the complaint completely anonymously, however the AGCO encourages members of the public to include their contact information in any and all complaints to ensure a full and accurate investigation is completed.

Once a complaint has been submitted it will be forwarded to the correct department for review. All complaints will be kept confidential throughout the process; however, it should be noted that the individual or establishment which is the subject of the complaint will be notified in order to make full answer to the accusations being made against them. The appropriate party will then reach out to the complainant with any further questions they have. An investigation will be conducted, and the AGCO will determine whether or not a violation has occurred.

It should also be noted that complaints can be filed against the Alcohol and Gaming Commission of Ontario in regard to issues with their service levels. For example, if you feel your liquor licensing application is taking too long, a complaint can be filed directly with the AGCO who will look into the issue on your behalf.

Consequences of Having a Complaint Filed

In some cases, the complaint filed against the individual or establishment will be found by the Alcohol and Gaming Commission of Ontario to be unfounded. In these situations, the file will be closed, and no further action taken. In situations however where the AGCO does find that the individual or establishment has violated the rules and regulations associated with their liquor license, there will be serious consequences for the offender. If the AGCO finds that the licensee has committed a violation, they may choose to suspend their license until such a time as the licensee can get into compliance with the applicable regulations. For example, if a licensee was found guilty of failing to provide proper signage in their establishment, their liquor license may be suspended until they can put up the appropriate signage. For more serious violations however, the licensee may lose their liquor license permanently.

Beyond the penalties imposed by the Alcohol and Gaming Commission of Ontario, civil action against those who violate the terms of their liquor license is also a possibility. Licensees who have been found guilty of over-serving patrons, who then leave and cause harm to others as a result of their excessive drinking, may be found civilly liable for the damage caused by the patron. For example, if an over-served patron gets into a car accident driving home intoxicated, the establishment that over served the individual may potentially be found liable for the injury caused and ordered to pay damages.

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