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. Leamington (Municipality) v. Ramirez

In Leamington (Municipality) v. Ramirez (Ont CA, 2023) the Court of Appeal considered a challenge to a Business Licensing bylaw which regulated a liquor license establishment:
[8] The appellant submits that the application judge made three reversible errors in granting the permanent injunction:

ii. he erred in failing to conclude that under the guise of requiring a business licence for a tavern, the Business By-law directly or indirectly prohibits or attempts to regulate the sale of alcoholic beverages, which is within the exclusive jurisdiction of the Alcohol and Gaming Commission of Ontario under the Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22;

(ii) The Business By-law does not prohibit or otherwise regulate the sale of liquor under the Liquor Licence and Control Act, 2019

[14] We do not accept the appellant’s submission that the Business By-law purports to prohibit or otherwise regulate matters exclusively covered under the Liquor Licence and Control Act, 2019.

[15] First, s. 151 of the Municipal Act clearly empowers the respondent to “provide for a system of licences with respect to a business”, including prohibiting “the carrying or engaging in the business without a licence”, as provided for in s. 9 of the Business By-law. This means that a business can be required to have more than one licence to operate – so the requirement for a business licence from the respondent does not detract from or change the requirement to have a liquor licence. Accordingly, the Business By-Law does not regulate matters exclusively covered by the Liquor License and Control Act, 2019.

[16] Further, the Business By-law does not purport to regulate aspects of the sale, consumption, distribution or possession of alcohol that are regulated by the Liquor Licence and Control Act, 2019. Nor does it impose any prohibited conditions or limitations as set out under s. 1 (a) and (e) of Licensing Powers, O. Reg. 583/06, under the Municipal Act, namely, under s. 1(a) “any condition with respect to the sale or service of liquor, as defined in the Liquor Licence and Control Act, 2019, as a requirement of obtaining, continuing to hold or renewing a licence issued by the municipality”; nor under s. 1(e) “as a requirement of obtaining, continuing to hold or renewing a licence, any condition respecting containers for alcoholic beverages, including a condition requiring the vendor of alcoholic beverages to establish, operate or maintain a system or facilities for the return of containers for alcoholic beverages”.

[17] That the refusal of a business licence may result in the closure of an establishment licensed to sell alcohol does not constitute the regulation of the sale of alcohol. The coordinate operation of various licences to regulate different aspects of a business is expressly recognized in s. 12 of the Business By-law:
The requirement of a Licence under this By-law is in addition to and not in substitution for any other requirement to obtain a license or licenses under any other federal or provincial regulation and does not relieve any party from its obligations to comply with any other law.
[18] Finally, the Liquor Licence and Control Act, 2019 regulates the sale, consumption, distribution and possession of alcohol but it does not purport to regulate all aspects of a place or the operation of a business where those activities occur. For example, s. 40(1) of the Liquor Licence and Control Act, 2019 specifically provides that a municipality may prohibit the sale or consumption of alcohol in recreational spaces.
. Fox North Bay Inc. v. Registrar (Alcohol and Gaming Commission of Ontario)

In Fox North Bay Inc. v. Registrar (Alcohol and Gaming Commission of Ontario) (Div Court, 2022) the Divisional Court reviews some basics of the liquor and cannabis regimes in Ontario, here in a judicial review application:
The Statutory Context

[6] The Alcohol and Gaming Commission of Ontario ("AGCO") is established by the Alcohol and Gaming Commission of Ontario Act[2], as a Crown agent statutorily empowered to administer and enforce the LLA and Cannabis Licence Act ("CLA")[3]. Sellers who want to sell liquor or cannabis must apply for and obtain a licence or permit under the respective act. Under the CLA¸ a seller must obtain two licences, one for the store and one for the manager. The Registrar enforces the acts through monetary penalties, refusing new applications, or granting applications with conditions.

[7] Pursuant to the LLA and the CLA, the Registrar may impose conditions on a licence to which the licence holder has not consented by two different procedural choices:
1) by issuing a Notice of Proposal which entitles the licensee to a hearing before the License Appeal Tribunal ("LAT") conducted in accordance with the Statutory Powers Procedure Act[4] and a further right to appeal on a question of law to the Divisional Court; or

2) pursuant to a regime created in 2006 referred to as Risk Based Licensing ("RBL"), provided for in the LLA and CLA to mitigate foreseeable risk, permitting the Registrar to make a decision imposing conditions with no right to a hearing or right of appeal.
[8] The Registrar has the same procedural choices to proceed by way of Notice of Proposal or Risk Based Licensing where, as in the instant case, an application is made to transfer a licence pursuant to s.17 of the LLA.

[9] In determining whether to afford an applicant the right to a hearing, or to proceed pursuant to RBL, the legislation is silent on the criteria to be considered by the Registrar. Similarly, in determining whether there has been a "change in circumstances", the only avenue provided to remove a condition imposed under RBL, the legislation is silent on the criteria to be applied. A representative of the AGCO, Ms. Stephanie Balaban, who was called by the respondent to explain the RBL system, further confirmed that there are no directives, guidelines, benchmarks or standards in existence as to the criteria to be applied by the Registrar in making the procedural choice to deny a right to a hearing, or in determining whether there has been a "change in circumstances".

[10] The Liquor Operations Manual ("LOM")[5] intended to guide Staff through the process of administering applications under the LLA provides no guidance respecting the Registrar's discretion to deny an applicant a right to a hearing, or the Registrar's discretion respecting what constitutes a "change in circumstances".

[11] When RBL came into effect, a Policy Paper[6] presented to the AGCO Board, stated that "the hearing process [Notice of Proposal] will be used for matters that involve greater public safety and public interest risks, or where there is an enhanced level of risk of noncompliance" and that "less significant changes in circumstances will be managed by redesignating the license and adding, removing or changing conditions on the license [RBL]."

[12] The risk criteria established by the AGCO Board for RBL include past conduct and infractions against the applicant. The most serious infractions include intoxication (over-service of alcohol), disorderly conduct, sale and service to minors, over-capacity, and selling outside prescribed hours or conditions of licence. The Board has specified 89 LLA conditions and 33 CLA conditions that the Registrar can impose under RBL. The Registrar may designate licence-holders according to risk level pursuant to the criteria established by the Board, and impose conditions specified by the Board (LLA s. 8.1(3); CLA s. 6(6)). The Registrar can redesignate a licensee's risk level and remove or change a condition imposed under the RBL regime if there is a change in circumstances (LLA s. 8.1(4); CLA s. 6(6)).


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Last modified: 11-05-23
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