An often-misunderstood aspect of the liquor industry by aspiring brewmasters and restauranteurs is the sheer number of regulatory steps required to import, manufacturer, distribute, and/or sell alcohol in Canada. Complicating matters is the fact each province may have its own separate rules and licensing regimes.
This blog explores the various provincial licenses required to start an Ontario liquor business.
Ontario Licensing Regime
Section 2 of Ontario’s , 2019, SO 2019, c. 15, Sched 22 (the “LLCA”) prohibits nearly all commercial activity involving the sale, transfer, and consumption of liquor UNLESS under a provincially-mandated licence.
“Liquor” is defined to include “spirits, wine and beer or any combination” thereof.
The LLCA and its associated regulations create six broad categories of licences: (1) manufacturers; (2) those operating a “liquor consumption premises”; (3) those making deliveries; (4) those operating a retail store; (5) those “fermenting” on premises; and (6) those representing manufacturers (e.g., agents and other representatives) in respect of the sale of liquor. (Thankfully “homebrewing” operations for strictly personal use are not a regulated activity!)
These licenses are supplemented by a suite of other class “endorsements” (allowing the licence-holder to sell and serve liquor beyond what is allowed under the licence) and other “permits” under the LCCA’s regulations (which are required for additional specialized and extended activities under the principal licence).
For example, a manufacturer’s licence is divided into separate “Winery”, “Brewery”, and “Distillery” classes, with further specific endorsements for selling liquor by-the-glass, catering, and temporary extensions of the licence to sell at events (e.g., Farmer’s Markets). Complicated!
Recent Changes
The LLCA’s regulations were overhauled last year for the first time in 40 years, to the general approval by industry. Ontario Craft Brewers — the industry organization for craft brewing — called the changes a “big win” for the craft beer industry.
The changes included:
1. Allowing manufacturers to sell liquor products at temporary craft brewing promotional events (e.g., trade shows, festivals, farmer’s markets);
2. Allowing manufacturers with an on-site retail storefront to sell anywhere on the production site where the store is located; and
3. Allowing some curbside pickup at grocery stores and wine boutiques.
Bottom Line
Compliance in this space is extremely granular and requires an understanding of several different rules and regulations. Additionally, licensing and permits are only a small part of the puzzle in the overall regulatory landscape.
Other important aspects include proper application of the myriad of federal and provincial tax rules applying to beer, wine, and spirits – something that we have a lot of experience with as well!
Do you require assistance in this area? If so, please click here.