November 9, 2021
Regulations required to modernize the new liquor framework under the Liquor Licence and Control Act, 2019 (LLCA) have been approved and filed. The LLCA will enable the AGCO to modernize the way it regulates the sale, service and delivery of liquor, and importantly, allow for a more flexible approach to regulation.
The new framework will come into force on November 29, 2021. AGCO 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 framework when the LLCA comes into effect.
Later in November, the AGCO will publish a guide on its website to assist licence, permit and authorization holders in understanding the new liquor framework and to support their transition to the LLCA.
In the interim, this bulletin outlines highlights of the new framework for the AGCO’s licence and permit holders, including:
- New Permissible Activities and Red Tape Reforms
- Enhanced Social Responsibility Measures
- New Licence Structure
- Registrar’s Interim Standards and Requirements for Liquor
- Patio Policy for Eligible Liquor Sales Licensees
Under the LLCA, several new permissible activities for licence holders will take effect. The government added, removed or changed provisions to modernize the existing liquor framework to reduce burden, facilitate better monitoring and compliance and reflect the changing liquor landscape for the benefit of Ontarians. The regulatory authority for some activities will also be transferring from the LCBO to the AGCO.
The changes include:
- Oversight of distribution and off-site warehousing will be transferring from the LCBO to the AGCO; this change will impact Ontario liquor manufacturers.
- Manufacturers will be permitted to deliver the liquor products of other licensed manufacturers that have an on-site retail store; a delivery endorsement will enable this activity.
- 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.
- All licensed grocery stores will be able to offer beer, wine and cider (as applicable) online for curbside pickup at the store, as permitted under their licence.
- Licensed grocery stores will be permitted to display non-liquor products, excluding energy drinks and products that promote immoderate consumption, within the contiguous aisles where liquor products (i.e. beer and cider, wine) are displayed.
- The ABV limits that wine and brew pubs are currently subject to will be removed. Previously, wine pubs could not sell wine with greater than 14% ABV, and brew pubs could not sell beer with greater than 6.5% ABV.
- Ferment on premise facilities will be permitted to combine multiple customers’ ingredients, allowing innovative practices such as barrel aging.
- Liquor Sales Licence holders will be permitted to infuse liquor to create drinks or change the flavour of liquor through practices such as barrel aging, as long as the customer is informed.
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. Starting July 1, 2022, a recertification requirement will be introduced. 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.
The LLCA will introduce a new, more flexible liquor licence structure. The AGCO will issue liquor licences for six licence categories, associated licence classes and endorsements for additional activities.
The classes and prescribed special occasions for Special Occasion Permits will generally remain the same.
The AGCO will update the iAGCO online portal on November 29, 2021 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 as of November 29:
- The name of some authorizations, licences and endorsements will change.
- Affected licence holders will not need to take any action.
- 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.
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. There may be many ways for a licence holder to meet a standard, providing the flexibility to determine what works best for their business.
Currently, the rules that licence, permit and authorization holders must follow to comply with their AGCO licence requirements are found in statutes, regulations and Registrar Policies. When the LLCA comes into force, the Registrar’s Interim Standards and Requirements for Liquor (Interim Standards) will come into effect and will apply to all licence and permit holders in the liquor sector.
The first set of standards and requirements under the LLCA are “interim” because they will be replaced by permanent standards. The Interim Standards will simply maintain and consolidate many of the current rules and will also introduce some new rules for new activities and new AGCO authorities. Other rules for the liquor sector will remain in statutes and regulations.
The AGCO will soon begin working to develop the Registrar’s Standards and Requirements for Liquor that will build the outcomes-based regulatory model enabled by the LLCA. Development of the permanent standards will occur over the next two to three years and will include engagement with the industry.
The Interim Standards are available on the AGCO website now to allow licence and permit holders time to become familiar before they take effect.
To continue to provide flexibility to businesses impacted by the COVID-19 pandemic, the AGCO Registrar intends to extend the policy to allow for the temporary physical extension of premises (i.e. patios). Regulation 746 under the LLCA provides the Registrar the authority to approve and determine the duration of temporary physical extensions of premises at liquor licensed establishments. Once the new liquor framework under the LLCA is in force, the Registrar intends to extend the existing policy, to allow for the temporary physical extension of premises at liquor licensed establishments, until January 1, 2023. See the December 9, 2020 Information Bulletin (Annex A) for the existing policy.
For More Information
The AGCO is committed to supporting licence and permit holders and stakeholders during the transition to the new liquor framework. In addition to the upcoming guide that will be published on the AGCO’s website, liquor licence, permit and authorization holders are also encouraged to review the: