LCLB REPORT
by Karen Ayers

Licensee Retail Store Moratorium Extended
In May 2004, the Solicitor General announced that the moratorium on new LRS applications would remain in effect for at least four years, and that government would not be considering any major changes to policy. This was in response to stakeholder requests for stability and increased certainty within the marketplace. The government recently confirmed that it intends to maintain the moratorium for the foreseeable future, as well as the 0.5 kilometre distance separation requirement. 

Caution to Licensees and Third Party Operators of LRSs 
Recently, there have been situations where the LCLB has had to cancel an LRS licence because the LP establishment has ceased to operate for some reason. The circumstances include such things as the licensee losing their lease, not renewing their licence on time, or not operating their bar or pub a sufficient number of hours and/or days each week. Often these situations involve third party operators who are running the LRS. 

Operators need to fully understand the implications of entering into a third-party agreement to run an LRS. The LRS licence only exists in association with an LP establishment, and the LP licence holder continues to own the LRS licence. He or she cannot sell one and retain ownership of the other. In addition, if the associated bar or pub licence is cancelled for any reason, the associated LRS licence is also cancelled. Once a LRS licence is cancelled, it cannot be reinstated. 

Move to Intelligence-based Enhanced Suitability Reviews (“Fit and Proper”)
Criminal involvement in licensed establishments is a concern among licensees, police, local governments, and the LCLB. The possible presence of criminal interests in the ownership and management of licensed establishments presents a potential risk to the integrity of the liquor control system. 

The LCLB piloted a new enhanced suitability review policy to ensure that an applicant or licensee was a “fit and proper” person to hold a liquor licence. The objective of this policy was to prevent criminal involvement in licensed establishments. The policy focused on licensees who came to our attention as allegedly not meeting the definition of a “fit and proper” person as required by the Liquor Control and Licensing Act, usually through intelligence information provided by the police or other enforcement personnel. The policy also automatically applied to any individual newly applying for an LP licence with 150 or more seats.

We have recently refocused our policy, and now no longer automatically refer all individuals applying for an LP licence of 150 or more seats to the enhanced suitability review. We continue to conduct detailed intelligence-based reviews of new applicants or existing licensees whenever we have reason to suspect that an individual is not a “fit and proper” person for the purposes of holding a liquor licence, or suspect that an individual may have links to criminal activity or organized crime. Automatic referrals significantly increased the time required to review and approve a licence, and meant that investigators had less time to focus on more valuable intelligence-based reviews. This focused approach will enable us to better target our resources to address potential criminal involvement in licensed establishments. 

Compliance Project
The Solicitor General recently gave the LCLB responsibility to monitor all liquor retail outlets in the province to ensure they are complying with relevant provisions of the Liquor Control and Licensing Act and Regulations.
Beginning in January and over the next few months, liquor compliance staff will tour the province to conduct inspection audits of government liquor stores, rural agency stores, agency appointment stores, manufacturer retail stores, wine stores, and LRSs. The audits will focus on contraventions specific to retail outlets, such as selling to minors or intoxicated persons, and sales after hours. Members of the team may pose as customers to assess overall compliance, and monitor whether staff ask to see their ID.

We will contact outlets that appear not to be complying, either by letter or in person, to ensure that all operators are aware of their responsibilities around the sale of liquor.