Information Bulletin: Highlights of Recent Liquor Reforms to Support Businesses

December 9, 2020

The Government of Ontario has amended a number of regulations that affect the liquor industry. These reforms are intended to support businesses as they work to recover from the COVID-19 pandemic and offer consumers greater choice and convenience, now and into the future.

In addition, the Alcohol and Gaming Commission of Ontario (AGCO) is amending some of its policies to provide additional relief and reduce administrative burden for businesses. These policy amendments impact a number of AGCO licensees, including liquor sales licensees, liquor delivery services, and manufacturers.

The changes will take effect on January 1, 2021, unless otherwise noted, and online applications for new authorizations will be available in the iAGCO portal starting January 3, 2021.

Licensees are reminded that they must continue to follow any public health measures put in place by the Ontario Government or their municipality. The AGCO updates a page on its website to help licensees understand how the province’s COVID-19 Response Framework affects them.

The following changes are outlined in this Bulletin.

Providing relief and flexibility for local businesses and restaurants

• Liquor takeout and delivery with food from eligible liquor licensed establishments permanent
• Minimum price for spirits
• Flexibility for the Registrar to approve the duration of temporary extension of premises
• Allowing liquor sale and service on docked boats

Changes for liquor delivery

• Ability to act on behalf of a customer, a liquor sales licensee or a retailer
• Record keeping requirements
• Storage of liquor by Liquor Delivery Licensees
• Permissible hours for delivery from a retail store
• Minimum liquor delivery fees
• Package size for beer

Improvements for Ontario manufacturers

• Delivery from manufacturer retail stores and The Beer Store
• Expansion of Farmer’s Market Program (100% Ontario Wines and Eligible Spirits)

Extending retail hours of sale

• Temporary Extended Retail Hours of Liquor Sales from 7:00 a.m. to 11:00 p.m.

Providing Relief and Flexibility for Local Businesses and Restaurants

1. Liquor takeout and delivery with food from eligible liquor licensed establishments 
   Regulation 719 under the Liquor Licence Act (LLA) has been amended to permanently allow eligible liquor sales licensees to offer the sale of liquor with food for takeout and delivery orders. Related amendments for liquor delivery service licensees have also been made to Regulation 718.
    
   Several key changes have been made to the temporary provisions that were introduced in March 2020, as well as new requirements added. 
    
   Effective December 9, 2020:

   • Liquor sales licensees may sell liquor for takeout and delivery with food unless:
     • The licensed premises is or is located within, a convenience store, grocery store, department store or big box store, and the Liquor Sales Licence was issued or transferred before December 9, 2020;
     • The primary purpose of the licensed premises is not the sale and service of food or liquor for consumption on the premises, and the Liquor Sales Licence was issued or transferred on or after December 9, 2020; or
     • The licensed premises is located within another commercial establishment (e.g. a store) other than a shopping mall, and the Liquor Sales Licence was issued or transferred on or after December 9, 2020.
   • For greater clarity, where the primary purpose of the licensed premises is not the sale and service of food or liquor for consumption on the premises but the Liquor Sales Licence was issued before December 9, 2020, the licensee may sell liquor for takeout and delivery with food, unless the licensed premise is or is located in a convenience store, grocery store, department store or big box store.

   Effective January 1, 2021:

   • Delivery of liquor with food orders from an eligible liquor sales licensed establishment must now be conducted by the licensee, their employee, or the holder of a Liquor Delivery Service Licence (including their employees and contractors). Employees or contractors of the delivery service do not require a licence themselves. Previously, third parties (e.g. food delivery service providers) could deliver on behalf of a liquor sales licensee as their agent and did not require a licence. As of January 1, 2021, this will no longer be the case.
   • Where a third party holding a Liquor Delivery Service Licence takes orders and conducts the delivery on behalf of a liquor sales licensee, the two parties must have an arrangement for that purpose.
   • Liquor sold for takeout or delivery must be “securely closed”. This is a change from the current requirement that liquor be “sealed and unopened” and is intended to provide more flexibility for liquor sales licensees in offering drinks for takeout and delivery, including mixed drinks and growlers.
   • In addition to a residence, deliveries from a liquor sales licensee may now be made to any private place, as defined in subsection 3(1) of Regulation 718. This aligns with existing requirements for delivery from retail stores.
   • Food must be purchased along with liquor sold for takeout or delivery, and it must be food sold by the liquor sales licensee holder at the licensed premises.
   • Record keeping requirements have changed, and depend on which entity receives the order from the customer.
     • For each order for liquor that is placed directly with the liquor sales licensee, the licensee must record, along with the licence holder’s name and address:
       • The name and address of the customer;
       • The date on which the liquor is purchased, and the date on which it is to be delivered;
       • The kinds and quantities of liquor to be delivered, and the price paid for them;
       • The address where the liquor is to be delivered; and,
       • The name of the person making the delivery, and, if the person is the holder of a licence to deliver liquor, or an employee or contractor of such a holder, that holder’s licence number.
     • The liquor sales licensee must keep this information for one year from the date of delivery of the liquor.
     • For each order that is placed with a liquor delivery licensee, the liquor sales licensee must keep a record for each sale that includes:
       • The kinds and quantities of liquor delivered; and
       • The licence number of the liquor delivery licensee who delivered, or whose employee or contractor delivered the liquor.
     • There are also record keeping requirements that apply to liquor delivery licensees. These requirements are set out in the delivery section further below as they apply to delivery from both liquor sales licensees and from retail stores.
   • There are many requirements currently in place under the temporary provisions that will continue to apply, including the following key requirements: the hours for takeout and delivery of liquor are 9:00 a.m. to 11:00 p.m; and persons involved in taking orders, selling, serving and delivering liquor must have successfully completed Smart Serve training.
   • There are additional changes that impact the Liquor Delivery Service Licence that are not specific to delivery from liquor sales licensees, and are outlined further below in this Bulletin.
2. Minimum price for spirits
   The minimum price for spirits sold for on-premise consumption in Regulation 719 under the LLA will be reduced to $1.34 per 1 ounce serving. This change aligns with the minimum price of spirits already in place for takeout and delivery of liquor with a food order.
    

3. Flexibility for the Registrar to approve the duration of temporary extension of premises
   Regulation 719 has been amended to provide the AGCO’s Registrar with the flexibility to determine the duration of temporary physical extensions of premises. Previously, licensees could only apply for a temporary extension of premises for a maximum period of 14 days. This permanent change gives the AGCO flexibility to respond to the evolving needs of the industry for the duration of the COVID-19 pandemic and into the future when public health restrictions no longer affect their day-to-day operations.
    

   Currently, under the Registrar’s 2020 temporary patio extension policy which expires on January 1, 2021, all eligible liquor sales licensees (including “By the Glass” licensees) may add or temporarily extend their licensed premises without application. The Registrar has indicated his support for allowing a continuation of the current policy until the end of 2021. Please see Annex A for the 2021 patio policy that the Registrar will approve once the amendment to Regulation 719 is in force.

4. Allowing liquor sale and service on docked boats 
   Amendments to Regulation 719 will also allow boat operators with a Liquor Sales Licence to permanently offer the sale and service of liquor while docked. Previously, in order to sell and serve liquor on a boat, the boat had to be used for the primary purpose of transporting its passengers and had to be underway. This change provides additional sales opportunities for boat operators and supports the tourism industry.
    

   Additionally, and as noted under the above change regarding temporary extension of premises, eligible boat operators with a Liquor Sales Licence will be able to continue to temporarily extend their premises (i.e. their docked boat) for the remainder of this year and for all of 2021, once the amendments to Regulation 719 are in force and the Registrar approves the policy (see Annex A).

Changes for Liquor Delivery

5. Ability to act on behalf of a customer, a liquor sales licensee or a retailer
   Regulation 718 under the LLA has been amended to allow liquor delivery licensees to act on behalf of liquor sales licensees, manufacturers with a retail store, and The Beer Store, in addition to being able to act on behalf of customers. This will allow liquor sales licensees or retailers to use a liquor delivery licensee to deliver liquor to a customer.
    

   As noted above, where acting on behalf of a liquor sales licensee, the liquor delivery licensee must do so under an arrangement with the liquor sales licensee for that purpose.

   Regulation 718 under the LLA has been amended to allow a benefit under agreements between an authorized manufacturer of liquor and a liquor delivery licensee, if the benefit is intended to facilitate or promote the purchase of liquor from the store, or the delivery of liquor. This change would enable, for example, a manufacturer with a retail store to pay a liquor delivery licensee for promotional activities related to sales from the manufacturer’s store.

6. Record Keeping requirements
   All orders for liquor placed with a liquor delivery licensee, an employee or contractor, whether for delivery from a liquor sales licensee or a retail store, must include the following information, along with the liquor delivery licensee’s name and address:

   • The name and address of the customer;
   • The date on which the liquor is purchased, and the date on which it is to be delivered;
   • The kinds and quantities of liquor to be delivered; and,
   • The address where the liquor is to be delivered.

   The liquor delivery licensee must keep the above noted records for each order for one year from the date of delivery.
   
   In addition, for deliveries by a liquor delivery licensee from a retail store, the licensee must also keep, for one year, a copy of every order given to the licensee by the retail store.

7. Storage of liquor by Liquor Delivery Licensees
   Regulation 718 under the LLA has been amended to allow liquor delivery licensees to store liquor that has been ordered by a customer from an authorized retail store or a liquor licensed establishment. Currently, a liquor delivery licensee must deliver liquor to the customer on the same day it is purchased from a retail store. The amendment will allow for the storage of liquor purchased from a retail store or from a liquor sales licensee in advance of delivery, provided that an order for liquor from a customer has been received. This provision applies to all liquor delivery licensees and would permit businesses that deliver food boxes, meal kits or gift baskets to purchase liquor ordered by a customer and store it in advance of delivery.
    

   Liquor must be stored securely before delivery and accessible only to the licence holder (including employees and contractors). Storage will not be permissible in a dwelling and the liquor delivery licensee will need to ensure that the liquor is not opened or tampered with.

8. Permissible hours for delivery from a retail store
   The permissible hours for the delivery of liquor by a liquor delivery licensee will be 9:00 a.m. to 11:00 p.m. for liquor purchased from liquor sales licensees and from retail stores. Previously, for liquor purchased from a retail store, liquor had to be delivered no later than one hour following the closing of the store from which the liquor was purchased.
    

   This change aligns the hours for delivery of liquor purchased from liquor sales licensees and from retailers.

9. Minimum liquor delivery fees
   The minimum delivery fees that must be charged by a liquor delivery licensee will be removed from Regulation 718 under the LLA to provide greater flexibility for licensees. Previously, Regulation 718 set out specific minimum delivery fee amounts, ranging from $4 to $6 depending on the location in Ontario.
    

10. Package size for beer
    Regulation 718 has also been amended to provide that, where a Liquor Delivery Service Licence is held, directly or indirectly, by an authorized grocery store operator, the liquor delivery licensee must ensure that beer for delivery is not purchased or obtained in packages with more than 6 containers from the LCBO, The Beer Store, or a manufacturer retail store. The exception is where the store from which the beer is purchased or obtained is a “Combination Government Store” listed in Schedule 2 of Regulation 718.

     
    Previously this restriction applied to all liquor delivery licensees.

Improvements for Ontario Manufacturers    

11. Delivery from manufacturer retail stores and The Beer Store
    Regulation 141/01 under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996 has been amended to give the Registrar authority over delivery of liquor to the public by manufacturers and Brewers Retail Inc. (The Beer Store) from their retail stores.
     

    Manufacturers are already permitted to deliver from their retail stores but cannot charge a fee. The Registrar has indicated support for allowing manufacturers and Brewers Retail Inc. to deliver from their stores for a fee, subject to requirements. Please see Annex B for the delivery requirements that the Registrar will approve once the amendment to the regulation is in force.

12. Expansion of Farmers’ Market Program (100% Ontario Wines and Eligible Spirits)
    Regulation 720 has been amended to expand the product offerings at farmers’ markets by permitting additional Ontario wines and allowing the sale of spirits at Ontario farmers’ markets. Licensed manufacturers of 100% Ontario wine or eligible spirits as defined in Regulation 720, and that operate an authorized on-site retail store will be eligible to apply to the AGCO for an occasional extension of their retail store in order to sell their products.
     

    Spirits are eligible to be sold at a farmers’ market if at least 50 per cent of the volume of spirits in the container holding them is made, from start to finish, at a production site in Ontario.

    Licensed manufacturers must be issued an Authorization for an occasional extension of its on-site retail store within a Farmers’ Market by the AGCO before they can start selling their products within a farmers’ market and must meet all the prescribed conditions of the authorization. Interested manufacturers may begin applying to the AGCO as of January 3, 2021, through the iAGCO portal.

Extending Retail Hours of Sale

13. Temporary extended retail hours of liquor sales from 7:00 a.m. to 11:00 p.m.
    To provide ongoing flexibility for customers and retail stores, the AGCO is authorizing an additional extension of the permitted retail liquor sale hours. Until July 1, 2021, the permissible hours for liquor retail sales will remain 7:00 a.m. to 11:00 p.m. to provide flexibility to retailers should they choose to offer early shopping hours for vulnerable people, including seniors, or otherwise extend their opening hours to support physical distancing efforts.
     

    This extension of hours applies to all authorized grocery stores, Manufacturer’s Retail Stores, LCBO stores (including Convenience Outlets), and Brewers Retail Inc. stores (The Beer Store).

Additional Information

The AGCO remains committed to protecting public safety and ensuring that liquor is sold, served, delivered and consumed in a responsible manner. Licensees must also ensure that any persons involved in the sale or delivery of liquor have completed Smart Serve training.

The AGCO continues to work closely with the Government of Ontario to find ways of supporting Ontarians and the sectors we regulate.

Any conditions on a licence or authorization continue to apply and licensees must continue to meet all other existing requirements in the LLA and regulations. Please note, while this Information Bulletin highlights specific details associated with many of the regulatory and policy changes, licence and authorization holders are urged to review the specific amendments to ensure that they are in compliance with all legislative and regulatory requirements.

• Links to electronic versions of the LLA and its regulations are available on our Acts and Regulations page.

Note: The AGCO website will be updated on January 1, 2021 to reflect the changes announced on December 9, 2020. Please visit www.agco.ca on or after January 1, 2021 for more information on the changes announced on December 9, 2020.

For more information:

• Call AGCO Customer Service at 416-326-8700 or toll free 1-800-522-2876
• Contact AGCO anytime via the iAGCO online portal

Annex A: Registrar’s 2021 Patio Policy for Eligible Liquor Sales Licensees including Boat Operators and “By the Glass” Licensees

Once the amendments to Regulation 719 are in force, and once permitted to open for on-site consumption, liquor sales licensees including premises that are boats and “By the Glass” licensees are authorized to temporarily extend or add a temporary physical extension of their premises, as of January 1, 2021 and until January 1, 2022 at 3:00 a.m., if the following criteria are met, as applicable:

1. The physical extension of the premises is adjacent to: 
   1. the premises to which the licence to sell liquor applies; or 
   2. a dock to which the boat is attached and may include land adjacent to the dock; or  
   3. the licensed premises under the “By the Glass” licence . 
2. The municipality in which the premises is situated has indicated it does not object to an extension; 
3. The licensee is able to demonstrate sufficient control over the physical extension of the premises;  
4. There is no condition on the licence prohibiting a patio;  
5. The capacity of the temporary extension, allows for at least 1.11 square metres per person; and 
6. In the case of “By the Glass” licensees, the sale and service of the wine, beer and/or spirits manufactured by the manufacturer within the physical extension of the premises is primarily aimed at promoting the manufacturer’s product and either providing an enhanced tourist experience or fulfilling an educational purpose. 

Licensees are not required to submit any documentation to the AGCO to demonstrate compliance with the above criteria. However, licensees are required to produce such documentation, if requested by the AGCO.

Licensees that do not meet the above criteria are required to follow the usual application process for a temporary extension of premises and apply through iAGCO.

Annex B:  Registrar Policy on Delivery to the public by manufacturers and Brewer’s Retail Inc.

Delivery by Brewer’s Retail Inc.

Brewer’s Retail Inc. (operating as “The Beer Store” or “TBS”) may deliver liquor eligible to be sold in any of its authorized TBS locations subject to the following requirements:

1. Liquor is delivered only to a residence or private place as defined in the Liquor Licence Act;
2. Any person who handles liquor has successfully completed a social responsibility training program;
3. Delivery is completed only between the hours of 9:00 a.m. and 11:00 p.m.;
4. Liquor is delivered to a person at the address provided with the order who is at least 19 years of age and does not appear to be intoxicated;
5. The person making a delivery of liquor inspects an item of identification before delivering liquor to a person who appears to be under 19 years of age;
6. A fee may be charged for delivery;
7. An order placed with the retail store must include the following information:
   1. The name and address of the customer.
   2. The date on which the liquor is purchased, and the date on which it is to be delivered.
   3. The kinds and quantities of liquor to be delivered.
   4. The address where the liquor is to be delivered.
8. For one year from the date of delivery of liquor, the retail store shall retain at its place of business, every record of an order required by paragraph 7.

Delivery by Manufacturers

Wineries and manufacturers of beer and spirits may deliver wine, beer or spirits, eligible to be sold in their authorized retail store, subject to the following requirements:

1. Liquor is delivered only to a residence or private place as defined in the Liquor Licence Act;
2. The person who handles liquor has successfully completed a Board approved training program;
3. Delivery is completed only between the hours of 9:00 a.m. and 11:00 p.m.;
4. Liquor is delivered to a person at the address provided with the order who is at least 19 years of age and does not appear to be intoxicated;
5. The person making a delivery of liquor inspects an item of identification before delivering liquor to a person who appears to be under 19 years of age;
6. A fee may be charged for delivery;
7. An order placed with a winery or a manufacturer of beer or spirits must include the following information:
   1. The name and address of the customer.
   2. The date on which the liquor is purchased, and the date on which it is to be delivered.
   3. The kinds and quantities of liquor to be delivered.
   4. The address where the liquor is to be delivered.
8. For one year from the date of delivery of liquor, a winery or a manufacturer of beer or spirits shall retain at its place of business, every record of an order required by paragraph 7.