BC Liquor Law: The New Liquor Control and Licensing Act

In any given year a significant number of new laws come into force in British Columbia. The announcement of most laws are confined to back pages of the British Columbia Gazette, while a select few warrant engaging headlines in newspapers and make the rounds on social media. For example this year the Motor Dealer Amendment Act and the Profits of Criminal Notoriety Act both came into force. While those are undoubtedly very important pieces of legislation for some segments of the population (like motor car dealers and notorious criminals) I expect that few British Columbians were aware that those Acts received Royal Assent on May 19, 2016. Conversely, the recent announcement that British Columbia’s new Liquor Licensing and Control Act will be coming into force on January 23, 2017 has been met with considerable fanfare.

By the time January 23, 2017 rolls around it will have been almost three years since Parliamentary Secretary John Yap released his much anticipated Final Report on B.C. Liquor Policy. Mr. Yap assembled his January, 2014 report over a period of 87 days in the fall of 2013. The thoroughly researched report considered the input from a variety of industry stakeholders through face-to-face meetings and the review of thousands of written submissions, emails and online comments. Ultimately the Yap Report arrived at 73 progressive, but measured, recommendations on ways to reform how beverage alcohol is sold in British Columbia. The government subsequently endorsed each recommendation, and in the months and years that followed legislative, regulatory, and policy changes have been announced from time-to-time.

Indeed, since endorsing the Yap Report the provincial government waded further into liquor law reform by engaging in 2015 with issues not directly addressed by Mr. Yap such as wine sales in grocery stores and changes to the liquor wholesale pricing regime. Needless to say none of these changes have been implemented without controversy: when it comes to regulating how British Columbians enjoy their libations (and at what price!) everyone has a point of view.

Background

Liquor law reform in Canada is a notoriously tricky business. In addition to the consumers of alcoholic beverages, who since the end of Prohibition have been continuously pressing government for the right to enjoy a greater variety of beverages that are produced and sold in increasingly dynamic ways, there are industry stakeholders to keep happy, government coffers to keep full and important social welfare concerns that must be respected.

A recent publication by the Canadian Centre for Policy Alternatives (Manitoba) highlights how fraught with conflict liquor law reform can be. Consumer benefits, such a lower pricing and increased access, must be balanced with protecting against service to minors and the damage to communities that the unchecked proliferation of licensed establishments can cause. The CCPA paper concludes that Alberta’s decision in the early 1990’s to privatize liquor retailing did not produce the low retail prices consumers were expecting, and left the province with a deadweight welfare loss.

Like any highly regulated industry where government-issued licences create scarcity, changes to the existing regime that increase competition or drastically re-write the rules can threaten the prosperity of existing licensees. Examples include the 2013 decision to permit tied houses, (allowing manufacturers to have an ownership interest in the bars that sell their product) and the 2015 decision to permit grocers to sell wine on their shelves. Though these are both examples of changes largely welcomed by consumers, the existing licensees who now have to compete against brewery-owned-restaurants or supermarket chains are less enthusiastic.

Changes in store for 2017

Since the Yap Report was published there have been no fewer than 63 policy directives issued by the Liquor Control and Licensing Branch to slowly implement Mr. Yap’s recommendations. As a result many of his substantive recommendations are already being enjoyed by British Columbians including: liquor sales at farmer’s markets (Recommendation #31), the return of “happy hours” (Recommendation #16) and the relaxation of restrictions placed on the types of alcohol stadium licensees can sell (Recommendations #56 and #57). In addition to these “consumer friendly” policy changes there have been a slew of technical changes relating to licensing, advertising and record keeping requirements.

On October 20, 2016 the other shoe finally fell: the Liquor Control and Licensing Branch announced that the new Act along with an all new Liquor Licensing and Control Regulation, would come into force January 23, 2017. The branch also published eight new licensee policy handbooks, setting out the terms and conditions attached to each class of liquor licence under the new Act (e.g. manufacturer or liquor primary), as well as six policy directives outlining the most substantive changes coming to liquor law and policy in British Columbia in the New Year.

The following is a summary of the more interesting changes that will take effect on January 23, 2017:

1. New flexibility to extend the hours of liquor service in exceptional circumstances

Currently licensed establishments are permitted to serve liquor between 4 a.m. and 9 a.m. (subject to the terms of the licence) and extended hours of service are not permitted. For example a licensed establishment can open outside its permitted hours to host a special event, such as an Olympic hockey game, but alcohol cannot be served outside the licensed hours. Under the new Act in “exceptional circumstances” licensees can apply in writing to the branch for approval to serve liquor outside the usual hours of service. Expect to see more bars and restaurants open for major sporting events taking place at odd hours.

2. Barrel Aged Cocktails

Currently licensees are not permitted to sell or store alcohol in containers other than the original bottle that the alcohol was purchased in the liquor distribution branch. That means that “infused” liquor, or barrel-aged cocktails (which are all the rage) are illicit. Fortunately, in the New Year licensees will be permitted to infuse liquor and age cocktails at the establishment. Expect to see more bars in Vancouver experimenting with the growing craft “cocktail culture”.

3. Home brewed beer and wine

Currently homemade beer and wine must be brewed at a “private residence”. Under the new Act beer and wine can be brewed at locations other than private residences, such as businesses and warehouses (so long as they are not public spaces).

4. Hotel patrons may take liquor from the hotel bar up to their rooms

Currently patrons at hotels must finish their drinks in the licensed area of the hotel dining room or bar. Under the new Act guests can take unfinished drinks up to their rooms.

5. BYOW at banquet halls

Currently licensees cannot permit guests to bring their own wine to a banquet hall. Under the new Act, subject to approval by the licensee, patrons can bring their own commercially-produced wine to licensed functions at food primary banquet halls.

6. Hotels and resorts may offer guests a free drink at check-in

Currently alcoholic beverages can only be consumed in the licensed area of a bar of restaurant affiliated with a hotel or resort. Under the new Act, on check-in, hotels may provide guests with a drink to be consumed in the lobby, or the guest may take it up to their room

7. Businesses outside hospitality, entertainment or beverage service can now apply for a liquor primary licence

Currently the Liquor Control and Licensing Branch will only approve liquor primary licences to businesses principally engaged in hospitality or entertainment. Under the new Act all types of businesses will be eligible to apply for a liquor primary licence. Expect to see spas, art galleries, cooking schools and barbershops all obtain liquor primary licences in the New Year.

8. Licensee may choose type of penalty for contravention

Under the current regime the general manager’s delegate determines whether a licensee who has contravened the Act will receive a monetary fine or a licence suspension. Under the new Act the licensee will be permitted, in most circumstances, to decide which penalty it would prefer to receive.

9. Liquor branch internal reconsideration process

Under the current enforcement regime the general manager has no authority to fix errors in his or her enforcement decisions and licensees who disagree have to apply to the B.C. Supreme Court for judicial review. Under the new Act licensees will be able to apply for reconsideration of enforcement decisions if the application meets one of the following prescribed grounds:

• there is new, substantial and material evidence that was not available at the time of the original hearing;
• there was an error of law
• there was a failure to observe the rules of procedural fairness

10. Compliance history to play a bigger role in enforcement decisions

The current Liquor Control and Licensing Act only requires that a licensee’s compliance history must be considered when taking action that would result in a penalty higher than the prescribed schedule of monetary penalties or licence suspensions. Under the new Act the compliance history of a licensee or permittee must be considered every time the branch takes enforcement action.

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Dan Coles is a litigation association at Owen Bird Law Corporation in Vancouver, BC. Dan practices in the area of Food & Beverage law and is the author of the Clawbie award winning blog Alcohol & Advocacy.