The Alcohol and Gaming Commission of Ontario (AGCO) employs a risk-based approach when issuing and regulating liquor sales licences. This is referred to as risk-based licensing. This allows the AGCO to encourage good business practices throughout the industry and to strategically focus regulatory resources where they will make the most difference.
Although there is always some risk attached to the sale and service of alcohol, the AGCO recognizes that because of their type of business, location, past history, experience, etc., some establishments pose a greater risk to public safety, to the public interest and/or to non-compliance with the law. Risk-based licensing is one of several initiatives implemented by the AGCO since 2007 to refocus decision-making based on risk assessments, and to move toward regulation based on compliance rather than solely on enforcement.
Overall, risk-based licensing is helpful for liquor sales licensees as it assists them in operating their establishments in a safe and responsible way, and in compliance with the Liquor Licence Act and its regulations.
The authority to carry out this new licensing regime is given to the AGCO under Section 8.1 of the Liquor Licence Act.
How Risk-Based Licensing Works
There are four key principles behind risk-based licensing:
- To identify persons or places that pose specific risks to public safety or the public interest;
- To lessen any risks and ensure compliance with the Liquor Licence Act through the entire lifecycle of a liquor licence;
- To reduce the administrative burden for those who pose a lower risk, where possible; and
- To focus more AGCO resources on those establishments that pose enhanced risks.
The application of risk-based licensing can occur at any point in the lifecycle of a liquor licence, and is a three step process:
- After an application is received, an assessment process takes place. During the initial application review, the Registrar of Alcohol, Gaming and Racing (“the Registrar”) uses AGCO Board-approved criteria to assess the risk(s) posed to public safety and public interest, and of non-compliance with the law.
- Licensees/applicants are evaluated under the criteria of past conduct, liquor-related infractions, honesty and integrity, financial responsibility, and training and experience. The premises themselves are evaluated under the criteria of type, location, occupancy, activities and hours of operation.
- After reviewing all the available information on both the licensee/applicant and the establishment, the Registrar assesses the risks and determines if the licence should have a Level I, Level II or Level III risk designation, or no designation.
- If the Registrar believes that no conditions need to be placed on a licence, or if a licensee has taken steps on his/her own to recognize and manage any risks, then the Registrar will most likely assess the licence as having no designation. These establishments will see no change in the way that their licences are administered.
- If the Registrar believes that a licensee may need more assistance and support to remain compliant with the Liquor Licence Act (for example, by placing conditions on the licence, or by focusing more of the AGCO´s resources on the licensee and the establishment), then the establishment will be designated at Level I, Level II or Level III.
- If the Registrar designates an establishment at Level I, Level II or Level III, s/he may attach certain conditions (from among those approved by the AGCO Board for this purpose) to the liquor licence to help address the identified risks.
During the lifetime of a licence, the Registrar can reassess the risk posed by the licensee. This reassessment can occur either because the licensee requests a reassessment, or because the Registrar becomes aware that there has been a change in circumstances and there should be a reassessment. At each of these times the Registrar may add, remove or amend one or more conditions.
For more information, see Risk-Based Licensing FAQs.