The AGCO Guide to the New Liquor Licence and Control Act, 2019 (LLCA) Framework

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INTRODUCTION AND HOW TO USE THIS GUIDE

Introduction

As part of its commitment to modernize the rules for the retail sale and consumption of liquor in Ontario, the provincial government introduced the Liquor Licence and Control Act, 2019 (LLCA), which came into effect on November 29, 2021.

In support of this new legislative framework for the liquor sector, regulations have been developed and are available at Ontario.ca/laws.

The LLCA provides more flexibility for stakeholders. Under the LLCA, some regulatory functions have been transferred from the LCBO to the AGCO. In time, the LLCA will provide the opportunity to transition the liquor sector to risk-based, outcomes-based, and compliance-focused regulation.

How to Use this Guide

This Guide is designed to provide you with information on these changes and explain what they mean for you.

If you are new to using this guide, follow the steps below or simply choose a section heading from the Table of Contents on the left.

Looking for something else? Here are some quick links to other sections of this Guide that may be helpful:

If you find that this guide is not what you are looking for, please use the top menu or search box to find other sections of the AGCO website.

Note: This guide is not an exhaustive examination of the changes to the liquor framework. Please refer to the Act, regulations and Interim Registrar's Standards to ensure compliance with your obligations as a licence or permit holder.

CHAPTER 1: LLCA Regulations: What’s Changing by Licence Type

Introduction

The Liquor Licence and Control Act, 2019 (LLCA) enables the AGCO to modernize the way it regulates the sale, service and delivery of liquor, and importantly, allows for a more flexible approach to regulation.

For information on how the new liquor framework lays the groundwork for a more flexible, modern approach to liquor regulation, see the Information Bulletin: Liquor Licence & Control Act, 2019 Framework Now in Effect.

LLCA Regulations

Under the LLCA, regulatory provisions for liquor licensing are now found in regulations under the LLCA. 

The LLCA’s regulations modernize the existing liquor landscape in Ontario and set out the rules for liquor in a number of areas, including:

  • Rules regarding the purchase, sale, delivery and storage of liquor
  • Licences and permits (including classes, sub-classes, and endorsements) and the conditions that businesses and individuals must follow
  • Regulatory oversight activities
  • Social responsibility measures
  • Transition of licensees into the new licensing regime

Four regulations have been developed under the LLCA. The information below summarizes what is included in each regulation and the changes from the previous regulatory framework that are relevant to the AGCO’s regulatory role. Licence and permit holders should refer to the LLCA, its regulations and the Interim Registrar’s Standards and Requirements for Liquor to ensure an understanding of the responsibilities and requirements applicable to their business.

Regulation

What’s Changing

Licensing Regulation (746/21): Sets out the rules and conditions for licences, licence classes, and endorsements.
  • Streamlined licence structure, with a licence and endorsements for additional activities.
  • Changes to contracting out and licence transfers.
  • Moving some regulatory oversight activities from LCBO to AGCO.
  • Transfer oversight of the Beer Store’s ancillary items list to the AGCO.
  • Require that Beer Store employees have training that addresses the responsible sale and service of liquor, and that the training be reviewed by the AGCO Registrar by July 1, 2023.
  • Moving permissible hours for retail stores to sell liquor to regulation, and continue with the hours of 7:00am to 11:00pm on a permanent basis.
  • Require all licensed businesses to confirm compliance with tax obligations, effective July 1, 2023.

 

Permits Regulation (747/21): Sets out the rules & conditions for permits & permit classes.

A streamlined permit structure with five  permit classes is established:

  • A sale permit
  • A no-sale permit
  • A sale tailgate permit
  • A no-sale tailgate permit
  • An auction permit

General Regulation (745/21):

  • Sets out exemptions from the provisions of the LLCA.
  • Sets out rules regarding the importation of liquor.
  • Sets out other requirements, such as the possession of liquor in private places, warning signs for alcohol during pregnancy, possession of liquor for research or education purposes, and possession of liquor in parks and conservation areas.
  • The term “carrier” is defined to ensure a clear understanding and bring consistency to the delivery framework. All retail stores, except wine boutiques and grocery stores, may use a carrier to deliver from their stores, subject to the parameters set out.
  • It is expressly set out that retail store operators (except wine boutiques and grocery stores) can deliver their own products for a fee.

Transitional Matters Regulation (767/21):

Provides for measures to support the transition to the new regulatory framework.
  • Continues existing licences and authorizations as licences and endorsements under the LLCA framework.
  • Provides that wine which could be sold under the Wine Content and Labelling Act, 2000 when it was manufactured can be sold under the new framework. 

Examples of some of the changes in the new liquor framework, organized by licence type, are provided below.

Liquor Sales Licensees

What’s New

The Previous Rule

Infused liquor to create drinks or change the flavour of liquor through practices such as barrel aging, as long as the customer is informed, will be permitted.

The licence holder can add a substance to a drink when requested to do so by the customer, but they cannot store liquor in a container other than the container in which it was purchased.

The ABV limits for wine and brew pubs will be removed.

Wine pubs may not sell wine with greater than 14% ABV, and brew pubs may not sell beer with greater than 6.5% ABV.)

Under “Take Home the Rest”, a bottle of commercially made wine removed from a licensed premise will need to be “securely closed”.  This will allow, for example,  a screw top bottle to be re-closed with the original cap.

The requirement is for the bottle to be “recorked”. 

Light meals will not be required in a licensed premise or at events under a Caterer’s Endorsement.

Light meals must be made available by a Liquor Sales Licensee and at events held under a Caterer’s Endorsement.

Licensed Manufacturers

What’s New

The Previous Rule

A new Temporary Extension Endorsement will allow manufacturers with an on-site retail store to sell liquor products at industry promotional events, in addition to farmers’ markets.

Manufacturers are able to apply for an authorization to sell at farmers’ markets.

Manufacturers selling in farmers’ markets and industry promotional events will be required to have their temporary extension endorsement readily available for inspection.

This rule does not currently exist.

The time for returning unsold product from a farmers’ market or industry promotional event to the manufacturer’s retail store has been extended to 72 hours from the time the market closes. This will apply new sales at industry promotional events.

Unsold product from a farmers’ market must be returned within 72 hours from the time it leaves the manufacturer’s store.

A new Delivery Endorsement will permit manufacturers to deliver the liquor products of other licensed manufacturers that have an on-site retail store to customers for consumption.

Manufacturers are not permitted to deliver the products of other manufacturers.

Manufacturers and third parties will no longer require a separate permission from the LCBO to distribute and warehouse manufacturer products. Oversight of distribution and off-site warehousing will be transferring from the LCBO to the AGCO.

Oversight of these areas conducted by the LCBO and a separate permission is required.

There will be enhanced flexibility for conducting retail sales anywhere on a production site, from the store at the production site. This could enable, for example, sales from the retail store to take place within a vineyard.

Sales must be conducted within the physical store.

Manufacturers will be able to sell products between their stores located at different production sites, provided that each production site has a store, and the manufacturer complies with the required production steps that must take place at each location.

The sale of products between a manufacturer's retail stores is not explicitly permitted for all manufacturers.

The sale of bulk wine, beer or spirits between manufacturers (used as an input to their production process) will be expressly permitted and is exempt from the requirement to have a licence, as long as the wine, beer or spirits inputs are sold to a licensed manufacturer.

Only wineries are permitted to engage in this activity, under certain conditions.

 

Licensed Grocery Stores

What’s New

The Previous Rule

Grocery stores with a Beer and Cider or Beer and Wine Grocery Store Licence will be able to offer beer, wine and cider for online ordering and sale for pickup at the store.

All aspects of sale, including ordering and payment, must take place in the store.Online sales not permitted.

Grocery stores will be permitted to display non-liquor products in the same area as liquor product types (i.e. beer and cider, wine) for the purposes of cross promotion.  Energy drinks and products that promote immoderate consumption may not be displayed for cross promotion with liquor products.

Non-liquor products cannot be displayed within the liquor product area.

 

Licensed Ferment on Premises Facilities

What’s New

The Previous Rule

It will be permissible to combine multiple customers’ batches, allowing innovative practices, such as barrel aging, to enhance the flavour of the final product.

Multiple customers’ batches cannot be combined.

The 90-day limit on contracting out of Ferment on Premises licences will be removed.

Licensees submit a 90-Day Contract Out Agreement with a transfer application.

 

Licensed Manufacturer’s Representatives

What’s New

The Previous Rule

A fee for delivery of liquor that has been purchased from a manufacturer or LCBO will be permitted.

A fee for delivery cannot be charged.

Representatives will be able to solicit orders at physical premises OR through a website, app or other similar online platform.  They must notify the Registrar within 5 business days after the platform begins to be used (there is already existing similar requirement for physical premises).

All representatives are required to have a physical premises unless their business model is such that they take orders by “moving from place to place”.

 

Licensed Delivery Services

What’s New

The Previous Rule

The 90-day limit on contracting out of Liquor Delivery Service licences be removed.

Licensees submit a 90-Day Contract Out Agreement with a transfer application.

The minimum age for employees and contractors is reduced from 19 years to 18 years to bring consistency with rules for licensed premises. 

Individuals have to be 19 years old to deliver.

 

Some Existing Requirements Moving to Standards

Under the new liquor framework, many requirements have moved from regulation or Registrar policy to the Registrar’s Interim Standards and Requirements for Liquor (Interim Standards). In addition, the Interim Standards contain some new requirements.

Examples of requirements that have moved from regulation to standards include:

  • Requirement to offer a variety of non-alcoholic drinks​
  • Requirement to provide a secure area for the storage of liquor
  • Requirement to post signage if a licence is suspended
  • Requirement to carry out business under the same name as set out on the licence
  • Requirements for those involved in the sale, service and delivery of liquor to have completed approved training (i.e., Smart Serve)​
  • Detailed record keeping requirements licensees are expected to meet.

Examples of existing Registrar policies and guidelines moving to standards include:

  • Sampling requirements
  • Advertising Guidelines (as an appendix to the Interim Standards)
  • Ancillary items list for manufacturer retail stores (as an appendix to the Interim Standards).

Examples of new requirements in the standards include:

  • Licensed manufacturers must ensure that their temporary extension endorsement is available for inspection when selling at a farmers’ marker or industry promotional event.
  • Licensed manufacturers must record all offsite warehouse locations and provide that information to the AGCO on request.
  • Auction permit holders must keep a record of the details of delivery to the successful bidder after an auction, for at least one year.
  • Liquor licensed establishments participating in takeout and delivery must include details of the food order as part of record keeping.
  • Liquor licensed establishments must record any liquor infusions or flavour modifications and retain that record for at least one year.
  • Licensed grocery stores must provide a secure area to store orders that have not yet been picked up.
  • Licensed grocery stores must create a record of curbside pickup orders and retain that record for at least one year.
  • All retail stores regulated by the AGCO must have measures in place to ensure that minors do not possess liquor on their premises.

CHAPTER 2: Features & Requirements under the New LLCA Legislative Framework

The Liquor Licence & Control Act, 2019 (LLCA) features a modernized legislative framework. Over time, the liquor sector will move to a risk-based, outcomes-based, and compliance-focused approach.

The AGCO’s liquor licence, authorization and permit holders will experience changes under the new framework. This includes changes to the licence structure.

Features of the new regulatory framework include:

  • The introduction of standards in the liquor sector
  • A new licence structure
  • Strengthened social responsibility measures

Introduction of Registrar’s Interim Standards

The LLCA supports a shift to a standards-based approach to regulation, which is the first step in creating a regulatory model that is more flexible and focuses on outcomes rather than prescriptive rules. Under the LLCA many provisions in the previous regulatory framework focusing on the operational aspects of a licence and permit holder’s business have been moved from regulation to the Registrar’s Interim Standards and Requirements for Liquor (Interim Standards). Previously, the rules that licence, permit and authorization holders must follow to comply with their AGCO licence requirements were found in statutes, regulations and Registrar Policies. In the new liquor framework, the Interim Standards will apply to all licence and permit holders in the liquor sector.

The Registrar’s Standards, once developed, will provide a more flexible, outcomes-based approach to addressing issues and shifts in the industry, while intending to provide a reduction in red tape for businesses.

The first set of standards and requirements under the LLCA are “interim” because the AGCO will soon begin working to develop the Registrar’s Standards and Requirements for Liquor that will build on the outcomes-based regulatory model enabled by the LLCA. Development of the standards will occur over the next several years and will involve significant engagement with the industry and key stakeholders.

New Licence Structure

The LLCA features a new, more flexible liquor licence structure. The AGCO now issues liquor licences for six licence categories, associated licence classes and endorsements for additional activities.

The classes and prescribed special occasions for Special Occasion Permits (SOPs) generally remain the same, with the Auction Authorization becoming an SOP class.

The AGCO has updated the iAGCO online portal to reflect the new LLCA framework, including changes to liquor licence types and certificates. As a result, licence and permit holders may notice the following changes when they access the iAGCO portal:

  • The name of some authorizations, licences and endorsements have changed.
    • AGCO licence, permit and authorization holders do not need to take any action before their scheduled renewal date.
    • The new wording will automatically be updated in iAGCO and at the time of licence renewal.

Licence holders will continue to apply for a new licence, request a change, or renew their current licence(s) in iAGCO.

Strengthened Social Responsibility Measures

The AGCO is committed to social responsibility and public protection in the liquor sector. Individuals involved in the sale, service or delivery of liquor are currently required to hold an AGCO Board-approved training certificate. Smart Serve is the only approved training program in Ontario. The AGCO is introducing a recertification requirement, starting in Summer 2022. Recertification will begin starting on July 1, 2022, but no certificates will expire until one year later, on June 30, 2023. All training certificates, including those already issued, will be valid for a five-year term before recertification is required. AGCO has adopted this industry best practice in recognition of the significant recent modernization to Ontario's liquor sector. More information about new Smart Serve recertification requirements is available in this AGCO Information Bulletin.

CHAPTER 3: Using iAGCO

This section is intended to provide you with support as you use iAGCO online services.

NOTE: The AGCO’s licence, permit and authorization holders do not need to take any action before their scheduled renewal date. All current licences, permits, authorizations and endorsements will transition to the new LLCA framework. 

The iAGCO online portal will be updated once the LLCA comes into effect to reflect the new framework, including changes to liquor licence types and certificates. As a result, licence and permit holders may notice the following changes when they access the iAGCO portal:

  • The names of some authorizations, licences and endorsements will change.
    • Affected licence holders will not need to take any action.
    • The new wording will be automatically updated in iAGCO and at the time of licence renewal.

Licence holders will continue to apply for a new licence, request a change or renew current licence(s) in iAGCO.

When using iAGCO online services, you are reminded that the process of completing your application takes time. This includes both the steps you must take to submit an application and the review and approval process by the AGCO’s staff. Please be sure that you have prepared everything you need to complete the submission of your application, including the required forms or documents.

For more information on iAGCO online services, visit the iAGCO Information page.

CHAPTER 4: Helpful Resources

The Liquor Licence and Control Act, 2019 (LLCA) makes it easier for businesses and consumers to understand liquor regulation rules. This new legal framework creates flexibility for future innovation, clarifies roles between the AGCO and the LCBO, and allows for a modernized approach by reducing red tape.

For more information on the LLCA, please view these helpful resources: