Requested Amendments to the Liquor Licence Act and Process

The Emergency and Protective Services Committee recommends the adoption of the following report (June 1, 1998) from the City Solicitor:

Purpose:

To report back by June 16, 1998 as requested by the Emergency & Protective Services Committee with respect to certain motions adopted by the Committee at its meeting of April 21, 1998 with respect to proposed amendments to the Liquor Licence Act and the liquor licensing process.

Funding Sources, Financial Implications and Impact Statement:

Not Applicable.

Recommendations:

"It is recommended that:

(1)That the Commissioner of Urban Planning and Development and the City Solicitor be authorized to consult with Provincial officials and the Alcohol and Gaming Commission of Ontario with respect to a proposal to amend the Liquor Licence Act and/or seek special legislation to address the matters outlined in this report, and report back to the Emergency and Protective Services Committee with the results of those discussions.

(2)That the discussion recommended in (1) also include references to required amendments to deal with problems in the existing liquor licence process."

Background:

At its meeting of April 21, 1998, your Committee had before it a number of communications relating to the existing process for the processing of liquor licence applications and the issuance and transfer of liquor licences. As a result of its consideration of the concerns expressed, the Committee requested that I report back by June 16, 1998 on:

(a)A co-ordinated strategy with respect to amendments to the Liquor Licence Act;

(b)Improving the process to revoke liquor licences for problem establishments; and

(c)A strategy to have the same "public interest" provisions which apply to liquor licensing applied to the issuance and revocation of business licences.

Comments and/or Discussion and/or Justification:

I should first point out that the Liquor Licence Act was recently amended by Bill 75 (the Alcohol, Gaming and Charity Funding Public Interest Act, 1996) which came into force on February 6, 1997. This Act amalgamated the former Liquor Licence Board and Gaming Commission to form a new body now known as the "Alcohol and Gaming Commission of Ontario". It is this body which now issues liquor licences.

Should City Council wish to proceed with a proposal for amendments, I would suggest that these proposed amendments be discussed with the Alcohol and Gaming Commission of Ontario and the Minister of Consumer and Commercial Relations.

Potential Amendments to the Liquor Licence Act:

Under the existing Liquor Licence Act, an applicant for a liquor licence is entitled as of right to a liquor licence unless sufficient evidence can be produced to establish the licence should not be issued. In other words, when challenging the issuance of a liquor licence, the burden of proof will be on the objectors to the licence (i.e. the local residents, police and/or the municipality) to show that, in the words of the statute, the licence is "not in the public interest having regard to the needs and wishes of the residents of the municipality in which the premises are located".

Where public interest is alleged as a ground for refusal or revocation of a liquor licence, the regulations under the Liquor Licence Act provide that, in the absence of receiving written submissions to the contrary, the Board shall consider a resolution of the Council of the municipality as proof of the needs and wishes of the residents of the municipality for the purposes of the Act. Such a resolution does not mean that the liquor licence will automatically be revoked or the application refused, but it will become part of the evidence which the Board will consider in making its decision. Therefore, substantive evidence of a detrimental impact on the community is still required.

Public interest is not considered with respect to the transfer of a liquor licence as the Liquor Licence Act explicitly excludes this as a ground for the refusal of a transfer. Therefore, no public notice is typically given of a transfer unless a specific condition has been attached to the liquor licence requiring such notice.

Compliance with municipal by-laws is contemplated under the Act and the regulations and a liquor licence will not be issued or may be revoked where the premises, accommodation, equipment or facilities in respect of which the licence is to be issued are not in compliance. Section 50 of Reg. 719 under the Act requires that a licensee must ensure that the premises comply with all applicable zoning by-laws, the Building Code Act, the Fire Marshal's Act and Health Protection and Promotion Act. Where a new liquor licence is applied for, the licensee must obtain compliance letters from the municipality with respect to Zoning, Building Code, Fire Code and Health before it will be issued. Where the municipality seeks to have a licence revoked for failure to comply with this legislation, experience has shown that the best evidence to put before the Board is a Provincial Court conviction for a Zoning By-law or Building Code violation. The Commission is understandably reluctant to take action with respect to by-law violations where the municipality itself has failed to lay charges or proceed with a prosecution in provincial offences court.

The Commission has held on numerous occasions in the past that concerns related to "municipal land use issues" such as littering, noise, parking or traffic are matters which will not concern the Board unless they are directly related to the sale and service of liquor. Otherwise, the Board is likely to take the position that these matters are within the jurisdiction of the municipality and that complaining residents should therefore turn to the municipality for relief.

I recommend that the City Solicitor and the Commissioner of Urban Planning & Development be requested to consult with officials from the Province and the Alcohol & Gaming Commission to obtain their views on the concerns raised by your Committee, which I would list as follows:

1.Establish more control by Municipalities (i.e. ability to place conditions on licences, hold public meetings).

2. Revocation/refusal of licence for by-law or other infractions.

3. Six-month probation period.

4.Provision of licence/application or infraction information to objectors or the City.

5. Requirement to give public notice of transfers.

6. Remove exemptions from the requirement for the posting of public notice.

7. Place onus on applicants/licensees to show community support for application.

Should Council wish to pursue these matters, the above items would likely require legislative amendments. The other items raised in the motions are already part of the liquor licence process and/or legislation.

Improvements to Liquor Licence Process:

As indicated above, the process to be followed for the revocation of liquor licences is governed by the Liquor Licence Act which is administered by the Commission. There is therefore little that it can be done, short of seeking legislative amendments, which would improve this process from a municipal prospective.

In terms of staff processes, Legal Services staff of the former City of Toronto have developed a form of municipal resolution including the appropriate statutory references which may be put before Council by the Ward Councillor recommending that City Council:

1.Seek revocation/refusal of the liquor licence on the basis of the grounds set out in the resolution;

2.Authorize the City Solicitor to attend any hearing before the Commission held with respect to the matter; and

3.Request that the hearing be scheduled as an evening hearing at a venue in the community so that the public may easily attend and voice their concerns.

The Commission has in the past been very responsive with respect to scheduling hearings so as to allow for maximum public input.

Difficulties have been encountered in the past with respect to obtaining information concerning liquor licence applications and information in the possession of the Commission as to applications and infractions. In order to obtain this information, Legal Services staff have to make a formal freedom of information request to the Commission which, in accordance with recent Provincial legislative changes, requires a $5.00 request fee plus charges of as much as $50.00 for copying the requested material. Material such as objectors' names and addresses or inspection reports will often be censored or not be released in order to comply with the requirement of the freedom of information legislation.

As the police are often primarily involved in the laying of liquor licence charges, Legal Services staff have routinely requested the assistance of the police in preparing for a liquor licence hearing. The police may be contacted and information requested as to any public interest concerns they may have, including whether particular charges have been laid, etc. Again, access to this information is governed by the Freedom of Information and Protection of Privacy Act.

Public Interest Provisions for Business Licences:

The inclusion of "public interest" grounds for the refusal or revocation of a liquor licence is expressly authorized under the provisions of the Liquor Licence Act. No such express authority exists with the respect to municipal authority to regulate the issuance of business licences. However, s. 11 of the licensing by-law No. 20-85 does arguably attempt to address public interest concerns as follows:

"11(1)An applicant for a licence, or for the renewal of a licence is, subject to the provisions of this by-law, entitled to be issued the licence or renewal, except where, ...

(e)The conduct of the applicant or other circumstances afford reasonable grounds for belief that the carrying on by the applicant of the business in respect of which the licence is sought would infringe their rights, or endanger the health or safety, of other members of the public."

Your Committee should be aware that section 11 was amended in 1985 as a result of concerns expressed that a broad and undefined "public interest" test would be contrary to the Charter of Rights and Freedoms. At that time the report (May 9, 1985) from the Deputy Metropolitan Solicitor and Executive Officer recommended the insertion of clause (e), stating:

"Recent judicial statements indicate that the Charter guarantees rights and freedoms in Canada subject to such reasonable limits prescribed by law, as can be demonstrably justified in a free and democratic society. Law must be ascertainable and understandable. Any limit must be articulated with some precision or the Courts will probably consider it to be inconsistent with the new constitutional requirement that the law must be ascertainable, understandable and reasonably clear regarding the standards or duties it imposes on those persons to be regulated. Standards or reasonable limits must have legislative or legal force in order to meet the criteria established by section 1 of the Charter of Rights and Freedoms or those limits could be declared invalid.

 . . . the proposals would clarify the licensing requirements of the by-law, provide a greater degree of certainty as to the rights of the person applying for a licence or coming before the Commission and reinforce the elements of procedural and substantive fairness mandated by the Charter of Rights and Freedoms."

These concerns are still valid today and are sufficient, in my view, to discourage any return to a broad public interest test.

Conclusions:

It is therefore recommended that the City Solicitor and Commissioner of Urban Planning and Development report back with recommendations for specific amendments to the Liquor Licence Act and a form of special legislation, if necessary, to regulate the issuance and revocation of liquor licences within the boundaries of the City of Toronto.

Contact Name:

Edward Earle

Legal Services

392-7226