TRUSTED ADVISOR AND ADVOCATE
TRUSTED ADVISOR AND ADVOCATE
The Alcohol Gaming Commission of Ontario (“AGCO”) regulates bars, restaurants, liquor delivery services, special occasion permits, liquor manufacturers and their representatives in Ontario. It does so by upholding the principles of honesty and integrity of licensees in accordance with the public interest. The AGCO is a Crown corporation with a board of directors appointed by the Ontario Cabinet. It employs an individual called a “Registrar” to make administrative decisions regarding liquor license/permit applicants and holders. The AGCO administers the Liquor Licence Act, 1990 to regulate the following individuals or businesses:
Burokas Law acts as a liquor licence lawyer in providing a range of services from representing individuals and corporations applying for a licence or permit to those facing any administrative action from the AGCO. Common examples include:
Liquor Licence Act
Under the Liquor Licence Act, 1990, individuals and corporations require a licence for the following activities:
Licence to Sell Liquor
An individual or corporation is entitled to a licence to sell liquor unless
A holder of a selling licence is not permitted to act under the agreement of a specific manufacturer or person associated or connected with one.
Notice to Public
If the Registrar of the AGCO cannot establish the above listed considerations but still has doubts about whether granting a licence is in the public interest, he or she must request written submissions from residents of the relevant local municipality about whether issuing a licence is in the public interest, having regard to their needs and wishes. If there are objections, the Registrar must consider them and may call a public meeting.
“Risk Based Licensing”
In circumstances that, in the opinion of the AGCO board, raise safety, public interest, and non-compliance risks; the AGCO may impose conditions on a holder’s licence and location where the licence is issued. Conditions may be added or removed as circumstances change.
Licence to Deliver Alcohol
An individual or corporation is entitled to deliver liquor if they have a licence to do so. An applicant or licensee (holder of a licence) is entitled to a licence (or retain it) unless the Registrar can establish:
Similar to a licence to sell liquor, a deliverer of liquor is not permitted to act under the agreement of any specific manufacturer or person associated with one.
Employees or agents of a manufacturer must obtain a representatives’s licence to canvas for, receive, or solicit business from alcohol sellers. This licence can be used strictly to conduct business with alcohol sellers like restaurants and bars, not the LCBO or the general public. All agents and representatives of an alcohol manufacturer must obtain a representative licence. An individual is entitled to a licence unless the Registrar can establish:
Ferment on Premise Licence
A ferment on premise licence (FOP) is required to allow an individual or corporation to operate a business where customers can make their own beer or wine for personal use. Such licensee cannot sell their own liquor and must obtain a federal FOP registration with the Canada Revenue Agency. An individual or corporation is entitled to operate a FOP business unless the Registrar can establish:
Special Occassion Permit
An individual or corporation may apply for a permit to allow them to sell liquor for special occasion like a stag and doe. They are entitled to do so unless the Registrar can establish:
Like selling licences, the Board of the AGCO may also establish additional conditions on a special occasion permit, called a “risk based permit”, based on public safety, public interest, and compliance concerns.
Investigations, Inquires, and Inspections
The AGCO has the ability to make inquires and conduct investigations into individuals' and corporations' competence, financial history, or character, in order to determine whether they meet, or continue to meet, the requirements for their licence. This includes their interested persons, or their officers, directors, shareholders (corporate licensees) or partners (if a partnership). The Registrar can require information or material from these individuals to assist in their inquiry or investigation and sign a written statement having the same effect as testifying in court.
The applicant or licensee must pay reasonable costs or provide security to the Registrar to pay for the inquiry or investigation.
The AGCO also employs inspectors who routinely inspect premises to ensure compliance with the Liquor License Act and may inspect documents, remove documents, inquire about bank accounts and financing, conduct tests, and, with a search warrant, remove materials for testing purposes.
The Liquor Licence Act, like many professional regulatory statutes, utilizes the concept of an “interested person” to ensure that individuals who have , or may have, influence over a licensee are subject to the same scrutiny as individuals or corporations who apply or hold licences. A person is deemed to be an interested person of another if:
If the Registrar of the AGCO considers an individual an interested person of a applicant or licensee, they will consider and individual’s past conduct in deciding whether to refuse, revoke, suspend, or fail to renew a licence.
Proposals- Refuse, Revoke, Suspend, or Refuse to Renew
If the Registrar believes an applicant or licensee does not meet one or multiple of the above listed criteria for the relevant type of licence, he or she will issue a Proposal. A proposal is an administrative action the Registrar can take to either refuse an application, revoke a licence, suspend an licence, or refuse to renew a licence when it’s up for renewal.
A proposal is a legal document that will outline what administrative action the Registrar is taking and why he or she is taking it. These reasons must be grounded in the above listed criteria for each type of licence.
The Registrar’s authority to determine whether a licence or permit should be refused or revoked is not absolute. Individuals and corporations receiving proposals can appeal the Registrar’s decision to the Licence Appeal Tribunal; an independent tribunal that hears evidence and arguments about why a licence or permit should or should not be granted/suspended. To appeal, an individual or corporation must serve a notice of appeal to the Licence Appeal Tribunal and the Registrar within 15 days of receiving the proposal. Otherwise the proposal will be carried out and whatever is being proposed on the proposal will be effected.
Hearings at the Licence Appeal Tribunal are governed by their Rules of Practice and Procedure. Generally, hearings are similar to a trial in court where each party may make opening submissions, call evidence, cross-examine the other party’s evidence, and make closing submissions. A member of the Licence Appeal Tribunal will sit as an independent adjudicator and make findings of fact, weigh evidence, make witness credibility findings, and apply those findings to applicable law.
It is very common for conditions to be attached to the various licences/permits described above. They often arise in situations where the Registrar has some concerns with an applicant or licensee, but they do not rise to the level of initiating or continuing with a proposal. Such conditions may impose restrictions on conduct or simply reiterate obligations already mandated by the Liquor Licence Act and it’s regulations. Conditions can be either imposed by the Licence Appeal Tribunal as outcome of a hearing, ordered as part of a resolution, or consented to by the applicant/licensee.
Offences and Prosecution
The AGCO also has powers to charge individuals and corporations with offences and prosecute them in court. The offences include:
Individuals found guilty of one of these offences (except selling liquor to minors) can be sentenced to a fine up to $100,000 ($250,000 for corporations) and one year imprisonment. For selling liquor to a minor, the maximum fines for individuals and corporations increase to $200,000 and $500,000 respectively and with a minimum fine of $1,000.
Any conviction under the Liquor Licence Act will have severe consequences on an applicant’s or licensee’s ability to enter or remain in the industry.
If you have any questions about acquiring a licence or permit in the alcohol sales industry, or have received notice of an administrative action against you by the AGCO, please don't hesitate to contact Burokas Law to ensure your rights and interests are best protected.