Liquor Sales Licences - Risk-Based Licensing FAQs

A licensee can be assessed as a Level I, Level II or Level III risk designation or receive no designation. A designation level represents a relative level of risk. Those licensees with no designation will have a lower level of risk than licensees with a risk designation of Level I and a Level II will have an overall lower level of risk than a licensee with a risk designation of Level III.

The designation level does not determine conditions. The use of conditions is intended to assist the licensee to either maintain compliance with the Liquor Licence and Control Act or lessen the risk inherent in identified situations unique to that establishment.

The designation level does, however, assist the AGCO in determining where best to focus its resources in the areas of licensing, compliance and enforcement.

No. It is anticipated that for most establishments, licensees will have taken action on their own to address the risk(s) identified during the assessment and will receive no designation. Risk levels are intended for premises and licensees where there is a greater risk to public safety, the public interest or non-compliance with the law.

The application of risk-based licensing can occur at any point in the lifecycle of a liquor licence, and is a three step process:

1. After an application is received, an assessment takes places where 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. Premises are evaluated under the criteria of type, location, occupancy, activities and hours of operation.
2. After reviewing all the available information on the licensee/applicant and 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 licensee 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 and Control 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 s/he will designate the establishment as Level I, Level II or Level III. The majority of these will fall into the Level I category.

3. Finally, after a designation of risk has been made by the Registrar, 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.

As risk-based licensing is an ongoing process and not just a one-time application, the risk level attached to a licensed establishment can change over time. During the lifetime of a licence, the Registrar can reassess the risk posed by the licensee and adjust the risk level either up or down. A licensee´s risk level can be changed either because the Registrar becomes aware of a change in circumstances that could lead to a reassessment, or because the licensee requests a reassessment.

There are two areas where risk will be assessed to determine an establishment´s level of risk:

1. risks that apply to the licensee or applicant, and
2. risks that apply to the premises.

The risk criteria that are applied to the licensee/applicant are:

• Past conduct
• Liquor-related infractions
• Honesty and integrity
• Financial responsibility
• Experience and training

The risk criteria that are applied to the premises are:

• Type
• Location
• Occupancy
• Activities
• Hours of operation

Yes. There will be discussions with the licensee/applicant as part of the overall assessment process.

Conditions are put on a licence to help manage the risks posed by the licensee or the premises, and to help the licensee stay compliant with the Liquor Licence Act and its Regulations. The conditions attached to a licence are not “one size fits all” but are chosen to meet the individual needs of the licensees. They are selected from a list of conditions approved by the AGCO Board for this purpose.

Some examples of conditions that may be attached to a liquor licence assessed at Level I, Level II or Level III include:

• The holder of the licence shall sell or serve liquor only in serving sizes approved by the Registrar of Alcohol, Gaming and Racing.
• The holder of the licence shall sell and serve liquor only in containers that are approved by the Registrar of Alcohol, Gaming and Racing.
• The holder of the licence shall sell and serve liquor only during the hours specified by the Registrar of Alcohol, Gaming and Racing.
• The holder of the licence shall not provide or permit amplified music or other forms of entertainment in outdoor areas.
• The holder of the licence shall not sell or serve and shall not permit consumption of liquor after XY o´clock on the patio or other outdoor areas.
• The holder of the licence shall ensure that the following individual(s) is/are not permitted to enter or be at or adjacent to the premises: NAME(S).
• The holder of the licence shall ensure that the identification of every patron who appears to be under the age of 25 years is checked and verified.
• The holder of the licence shall ensure that no person under the age of 19 years enters the premises.
• The holder of the licence shall ensure that the areas adjacent to and within XY metres of the premises are kept clean and free from any garbage associated with the operation of the premises and patrons.
• The holder of the licence shall not permit a Special Occasion Permit to be used for the premises in whole or part.
• The holder of the licence shall ensure that the premises is being managed by the individual(s) approved by the Registrar of Alcohol, Gaming and Racing, and that such individual(s) are present at the licensed establishment at such times as are specified by the Registrar of Alcohol, Gaming and Racing.

Please see the full list of Conditions that may be placed on liquor licence under risk-based licensing.

Under risk-based licensing, if a condition is placed on a licence by the Registrar, then the Registrar may remove the condition. If a risk no longer exists or the licensee can show that the establishment is being / will be operated responsibly without the need for the condition, then the Registrar may take that into account and remove the condition.

If a condition is placed on a licence by the AGCO Board or a panel of the Licence Appeal Tribunal (LAT) as a result of a hearing, this condition can only be removed by the LAT.

Sometimes the Registrar may require that a licensee draw up a plan to address one or more potential risks identified during the review. The AGCO will provide a guide to help licensees prepare the required plans. The types of plans include:

• Safety and Security Plan
• Compliance Plan
• Nuisance Mitigation Plan
• Patron Control Plan
• Management Control Plan

Please see the description of these Plans.

Before a licence is transferred, a new risk assessment is done on the proposed licensee and his/her proposed establishment (see Question 4). While some things about a premises won´t change (for example, it is still in the same neighbourhood), the new owner might change the type of business (for example, a sports bar becomes a fine dining establishment or vice versa) and that might mean different types of risk. The new owner will also have a different business background, etc., than the person transferring the licence, which could lead to different risks being identified.

Under risk-based licensing, for each new liquor sales licence application, a risk assessment of both the applicant and the establishment will be carried out using criteria approved by the AGCO Board.

A letter will then be sent to the licensee/applicant inviting him/her to provide comments on the proposed risk designation and conditions. The licensee/applicant will have a set time to provide comments, following which the Registrar will finalize the risk designation and conditions, and issue the licence.

One of the key goals of the AGCO is to focus both licensing and enforcement resources on those licensees and establishments that pose a greater risk to public safety and that are less likely to comply with the law. The AGCO´s Investigation and Enforcement Branch has also developed a risk-based approach to compliance which will be informed by the new risk-based licensing process. Liquor inspectors will continue to work closely with the AGCO´s Licensing and Registration Branch to share information about the status of liquor licences.