POLICY REPORT

LICENSING

Date: January 12, 1999

Author/Local:Guy Gusdal/6461

RTS No. 468

CC File No. 2610

TO:	Vancouver City Council
FROM:	Chief License Inspector
SUBJECT:	Policies for Changes to the Provincial Liquor Licensing Regulations

RECOMMENDATION

THAT the following policies and issues be forwarded to the consultant responsible for the Provincial Liquor Licensing Review:

(a)THAT high potency alcohol products (e.g., rice cooking wine & ginseng brandy) be regulated by reducing the permitted alcohol content to under 20 percent and requiring all products over 20 percent alcohol to be sold through liquor stores.

(b)THAT transfer of existing liquor licenses be facilitated by changes to the provincial regulations that would allow greater flexibility in relocation and conversion of all license categories, specifically Class ‘A’ Pubs in the Downtown Eastside and require municipal presite clearance/endorsement for liquor license applications for properties where an existing liquor license had previously been located.

(c)THAT timely enforcement under Liquor Control and Licensing Branch regulations be implemented which reflects the severity of the infractions by revamping the appeal process to shorten the preparation time for the appeal, and provide automatic penalties for specific infractions in the Liquor Act regulations with no provision to delay the penalty through appeal, similar to the system in Washington State.

(d)THAT trial or probationary periods for new licenses, amendments to existing licenses and transfers of existing licenses to new owners be introduced.

(e)THAT coordination of the City of Vancouver business license suspensions/closures and provincial liquor license suspensions/closures be improved by changing the regulations to require the liquor license operator to hold a valid subsisting municipal business license in good standing at all times (for those municipalities that issue business licenses) and, therefore, a suspension of the municipal business license will result in a suspension of the liquor license for the same time period and vice versa.

(f)THAT a City of Vancouver closure of a hotel result in a Liquor Control and Licensing Branch closure of the hotel’s pub/beer parlour by making the constant availability of the hotel rooms a condition for the validity of the hotel’s provincial liquor license.

(g)THAT the effectiveness of the existing 24 hour liquor license suspensions be improved by changing the regulations to allow the Police Department or Liquor Control and Licensing Branch inspectors to invoke the suspension within seven (7) days from the date of the infraction.

(h)THAT changes to Class ‘C’ Cabaret hours of operation, subject to municipal endorsement, to permit an earlier opening time be implemented, similar to the old supper or dinner clubs, with the condition that food service be provided and required and that the suggested opening time be 4:00 or 5:00 p.m.

(i)THAT City staff enters into discussion with the Liquor Control and Licensing Branch to facilitate changing cabaret hours to permit a later closing time so that entertainment could continue, but liquor service would still terminate at 2:00 a.m., noting that the following issues need to be discussed as part of this process:

i) All alcohol is ‘off the tables’ immediately once the closing tolerance period has expired.

ii)No minors are permitted during the non-alcohol service hours of operation.

iii)Closing time would be limited to sometime between 4:00 a.m. and 7:00 a.m.

iv)Cabarets in close proximity to residential uses require an acoustical assessment.

v)The liquor license must be maintained in good standing at all times and should infractions occur, the hours will be rolled back.

(j)THAT changes be implemented to licensing regulations to allow for specific areas or districts which would have regulations specifically tailored to the needs of that district based on municipal consultation, provided a thorough public process has been undertaken to establish municipal policy for the area.

(k)THAT the Liquor Control and Licensing Branch remove the provision which allows the licensing of non Coast Guard approved motor vessels for Class ‘A’ Lounges.

(l)THAT no changes be made to the licensing regulations for restaurants. The existing legislation allows for holding bars in restaurants and staff recommends that this not be considered for expansion until improved enforcement procedures are in place.

(m)THAT Council reaffirm its position with respect to Council policy on the following issues:

·330·support for regulation of U-Brews and U-Vins,·330

·330·non-support for the licensing of billiard hall establishments,·330

·330·non-support for active games or gambling in restaurants,·330

·330·non-support (at that time) for the opening of liquor store outlets on Sunday and statutory holidays,·330

·330·non-support (at that time) for the use of credit cards at liquor store outlets,·330

·330·non-support for the licensing of casino establishments.·330

(n)THAT taxation revenues generated by liquor sales be used to monitor and enforce liquor regulations and for treatment and social services related to liquor abuse.

GENERAL MANAGER’S COMMENTS

The General Manager of Community Services RECOMMENDS approval of the foregoing.

COUNCIL POLICY

There is no Council policy on these issues except that on March 15, 1997, Council approved the following:

·support for regulation of U-Brews and U-Vins,

·non-support of the licensing of billiard hall establishments,

·non-support for active games or gambling in restaurants,

·non-support (at that time) for the opening of liquor store outlets on Sunday and statutory holidays,

·non-support (at that time) for the use of credit cards at liquor store outlets.

·non-support for the licensing of Casinos.

SUMMARY

A fast-tracked liquor licensing policy review has been undertaken by the provincial government. The report identifies, explains and suggests changes to the regulations when appropriate, for issues of liquor licensing that are of significant concern to the City. Many of these issues have not yet been formally reviewed by Council.

PURPOSE

This report recommends policy on changes to the Provincial Liquor Licensing Regulations.

BACKGROUND

On November 13, 1998, the provincial government announced that "a thorough review of liquor regulations and policies will start immediately to support and encourage the development of high growth industries like tourism and hospitality". The review is to be conducted by Mr. J. Surich, principal of Transformation Solutions and is expected to be completed by January 31, 1999.

Staff have met with Mr. Surich on one occasion in early December 1998 to discuss issues sensitive to the City of Vancouver. It was noted at this meeting that many of the issues discussed have not been reviewed formally with Council and, therefore, are not official City policies.

It was explained to Mr. Surich that a discussion with Council would be required to develop this policy. It would then be appropriate and helpful if the Vancouver Liquor Licensing Commission meets with Mr. Surich to discuss these policies. Mr. Surich has agreed to meet with the Commission, once Council policy has been defined.

DISCUSSION

The following are issues for which there are no clear Council policies, are of significant concern to the City and should be considered by the Provincial Liquor Policy Review:

1.The non-regulated sale of high potency alcohol products (e.g., rice cooking wine & ginseng brandy).

The widespread availability of these products (primarily the rice cooking wine) in the Downtown Eastside is creating a substantial financial drain on city resources and serious health problems, including deaths, of the users of these products. Many of the rice wines have a potency of over 40 percent alcohol. The solution to making these products less palatable, to date, has been introducing a salt content of two percent. This salt content has not deterred the hardcore chronic inebriants from making this the drink of choice. The cost of a bottle is from $2 to $6, and at that price it provides the user "real bang for your buck". It is the high salt content, the very thing that is used to deter the users, that is causing the health problems among the rice wine users.

Potential Solutions:

a)Reduce the permitted alcohol content to under 20 percent.

Pros:

·could be simply done,

·no issues of infringement on different cultural groups,

·precedent has been set in other provinces, and

·reduces the attractiveness as an alcoholic beverage.

Cons:

·access to product remains uncontrolled,

·product may still be actively consumed, and

·health concerns due to high salt content still remain.

b)Require all products over 20 percent alcohol to be sold through liquor stores.

Pros:

·controlled distribution,

·salt content requirement could be eliminated,

·health issues are addressed, and

·price could be set to discourage over consumption.

Cons:

·does not address the "flavour of the day" phenomenon (i.e., something else will soon take its place) which may be more toxic,

·may meet resistance because of possible infringements on certain cultures, and

·access is limited for legitimate users.

2.Transfer existing liquor licenses to other locations.

There are a number of constraints preventing liquor license holders moving or transferring their license to another location within the city. Council set policy through the Theatre Row report that encourages the relocation of late night licensed premises out of the residential areas of Downtown South and into the Theatre Row Entertainment District. During subsequent discussions between staff, applicants and the public, it became apparent that there are other areas of the city where the relocation of liquor licenses would serve public good.

The transfer of liquor licenses has proven to be a difficult task. Provincial regulations and City bylaws do not mesh well to facilitate these transfers. The province can only consider relocations for cabarets or neighbourhood pubs within very specific circumstances and cannot consider the conversion and/or relocation of other license categories. There is no provision that would allow a Class ‘A’ Hotel Pub or Lounge to be converted and then relocated. Such an ability would be an effective tool to help reduce the number of licensed seats in the Downtown Eastside.

Council may endorse the relocation of provincial liquor license for a cabaret and the Liquor Control and Licensing Branch (LCLB) may approve this relocation but the City is still left with cabaret as the approved use in the original location. That is, the removal of the provincial liquor license does not negate the municipally approved use of the space in the building. Under current LCLB regulations, the owner could apply directly to the Branch and the only municipal involvement in this process would be for staff to confirm that the approved use for the space is cabaret. Staff are circumventing this loophole by requiring a legal agreement between the existing property owner, the liquor license holder and the City as a condition of the endorsement that the licensed establishment will be permanently closed at the existing location.

Potential Solutions:

a)Change to the provincial regulations that would: i) allow greater flexibility in relocation and conversion of all license categories, and ii) require municipal presite clearance/endorsement for liquor license applications for properties where an existing liquor license was previously relocated.

Pros:

·a quick alternative to the current cumbersome method,

·ability to redistribute liquor licensed seats from areas with a high concentration of seats or where the use is no longer compatible with the surrounding uses to more suitable areas of the city and to newer buildings.

Cons

·there may be legal issues that need to be addressed.

3.Timely enforcement under Liquor Control and Licensing Branch regulations which reflect the severity of the infractions.

Presently there is a substantial time lag, often as much as six months or more, from the date of the infraction to the date of the official response to the infraction. This delay is often attributed to the present appeal process and/or workload of the staff involved in processing the enforcement action. There may be other reasons for the delay which City staff are not aware of at this time. The delay results in the appearance of an ineffectual enforcement by the LCLB in the eyes of licensed premise operators, the Vancouver Police Department and City staff. There is a lack of correlation between committing an infraction and the consequence of being caught.

Potential Solutions:

a)Revamp the appeal process to shorten the preparation time for the appeal.

Pros:

·should be easily accommodated under the present regulations.

Cons:

·a time lag between offense and disciplinary action still exists and enforcement action could be "strung out" by operators wishing to avoid the penalty as long as possible.

b)Provide automatic penalties for specific infractions in the Liquor Act regulations with no provision to delay the penalty through appeal similar to the system in Washington State.

Pros:

·creates a direct and immediate correlation between the infraction and the penalty for the infraction,

·all licensed premises operators know up front the consequences for certain types of infractions,

·gives more authority to the provincial liquor inspectors and effectively allows the inspectors to issue immediate suspensions.

Cons:

·to limit the possibility of a successful appeal, the discretion of the enforcement officers (LCLB inspectors and the various Police Departments) would have to be clearly acknowledged along with clear guidelines.

4.Trial or probationary periods for new licenses or amendments to existing licenses.

There are no provisions for probationary periods for new liquor licenses or amendments to existing licenses. The result is an all-or-nothing choice for Council. The absence of this function under current licensing regulations severely hampers the City’s ability to endorse applications. New licensed premises or changes to existing would be easier to approve, particularly premises that are proposed in close proximity to residential uses (like neighbourhood pubs), if there was a provision to ‘reverse’ the decision should the operation prove to be inappropriate at that location. Ideally the trial or probationary period would also be applied to new owners of existing licenses or for operators which are chronic problem businesses.

Potential Solution:

a)Introduction of probationary or trial periods within the liquor licensing regulations.

Pros:

·provides a major enforcement tool to deal with new and existing license holders,

·provides a mechanism which allows the conditional approval of a new license or amendment when the actual impact of the establishment is difficult to determine and neighbourhood response to the notification is inconclusive.

Cons:

·the probationary period would eventually have to end and the use would then become entrenched.

5.Better coordination of the City of Vancouver business license suspensions/closures and liquor license suspension.

A valid municipal business license is not a requirement of the provincial liquor license. That is, if a business license is suspended by the Chief License Inspector or through a Show Cause Hearing, it does not automatically result in a similar suspension of the provincial liquor license even though the business no longer has a valid license to operate in the city.

Potential Solution:

a)Change the regulations to require liquor licensed operators to hold a valid subsisting municipal business license in good standing at all times (for those municipalities that issue business licenses).

Pros:

·a harmonization of the licenses will reduce potential confusion between jurisdictions and create the appearance of a united approached to enforcement.

Cons:

·does not appear to be any downside to this proposal.

6.Related to the above, a City of Vancouver closure of a hotel does not result in a Liquor Control and Licensing Branch closure of the hotel’s pub/beer parlour.

It has been LCLB policy to not close the hotel’s pub/beer parlour when the City has closed the hotel’s rooms. Even though the existence of the rooms is a condition of the license the LCLB has determined that the suspension or closure of the rooms is a temporary condition and, therefore, does not constitute a loss of the rooms and should not result in a suspension of the provincial liquor license. If the pub/beer parlour was suspended for the same amount of time that rooms are closed, then the enforcement action would be much more effective.

Potential Solution:

a)Make the availability of the hotel rooms a condition for the validity of the hotel’s provincial liquor license.

Pros:

·provides for a more significant penalty for problem businesses,

·provides incentive for proper maintenance of SRO’s,

Cons:

·does not appear to be any downside to this proposal.

7.Impracticalities of the existing 24-hour liquor license suspensions.

The current 24-hour suspension provisions are only effective in theory. When police officers and liquor inspectors are faced with a serious violation of regulations or an unsafe condition (e.g.. substantial overcrowding) they are faced with essentially three options: i) let the infraction go with a warning, ii) write a Licensed Premise Check (LPC) which may result in a letter or hearing months down the road, or iii) shut the establishment down at that time for 24 hours and put a large number of drunk, irate people out on the street. The third option in most cases is not possible from a policing perspective in that in many situations where an immediate suspension is warranted, the immediate suspension could result in a far more serious policing concern on the street. Thus, the 24-hour suspension in its present form is not a usable enforcement tool for Vancouver.

Potential Solution:

a)Change the regulations to allow the Police Department or the liquor inspectors to invoke the suspension within seven days of the infraction; that is the inspectors or the Police Department could require the business to be closed the following day before it opens for business.

Pros:

·should be a relative quick fix [the authority is already there, it just needs to be fine tuned],

·would add an effective enforcement tool to deal with operators that continually ‘break the rules’,

·increase the effectiveness of Police Department Licensed Premise Checks by adding ‘bite to their bark’,

Cons:

·to prevent abuse of this authority guideline for its use would have to be designed.

8.Change to Class ‘C’ Cabaret hours of operation to provide for limited earlier opening times (e.g.. dinner/supper clubs).

Club owners often relate to City staff the difficulty with making their clubs financially viable with the restrictive hours of operation and the increased competition from hotel pubs and lounges which have changed their operations to a ‘cabaret like’ format with the added benefit of longer hours of operation (14 consecutive hours in the day). Cabarets are often left with few options and many state the need to operate at their Fire Marshall Capacity which, in most cases, exceeds the provincial liquor license seating capacity. Most cabarets have applied for temporary seating increases under the LCLB regulations for special events, but recently it has been discovered that some clubs have been operating at the increased capacity on a regular basis. Industry and tourism complaints about the limited variety of nightlife entertainment in Vancouver are frequent.

Potential Solutions:

a)Change cabaret hours to permit an earlier opening time, similar to the old supper or dinner clubs (there are a few of these grand-fathered licenses still existing in the city) with the condition that food service be provided [that is, the cabaret could open at 4:00 or 5:00 p.m. and operate as essentially a Restaurant-Class 2 until 7:00 p.m. the existing cabaret opening hour].

Pros:

·increases the flexibility for cabaret owners to change formats and add variety to the industry,

·increases the financial viability of the cabarets and should reduce the ‘need’ for cabarets to bend the regulations,

·helps meet the planning objectives for the downtown by permitting these businesses the opportunity to open earlier and increase the street activity (presently these businesses are all required to be closed during the day),

Cons:

·will likely face opposition from the other liquor license classifications (restaurants, neighbourhood pubs, hotel pub/lounges),

·without a corresponding tightening of enforcement regulations, it may simply result in an extra two to three hours of ‘boozing up’ time.

9.Change to Class ‘C’ Cabaret hours of operation to provide, under very specific conditions, a later closing time so that entertainment could continue but liquor services would still terminate at 2:00 a.m.

Non liquor licensed cabarets (no alcohol dance halls) may not be directly related to the Liquor Policy Review but potential changes to the hours of operation for liquor licensed establishments may have a significant impact on the need for this type of facility in the city. Also, changes to hours of operation for the licensed cabarets may help to address the significant police concerns about their Right to Access in unlicensed cabarets.

Cabaret owners have suggested that there is a trend among club patrons, particularly younger patrons, to a "rave" type atmosphere where dancing is the primary draw and alcohol sales have declined relative to previous years.

Potential Solution:

a)City staff enters into discussion with the LCLB to facilitate changing cabaret hours to permit a later closing time so that entertainment could continue but liquor service would still terminate at 2:00 a.m. The following issues need to be discussed as part of this process:

i)All alcohol is ‘off the tables’ immediately once the closing tolerance period has expired.

ii)No minors are permitted during the non-alcohol service hours of operation.

iii)Closing time would be limited to sometime between 4:00 a.m. and 7:00 a.m.

iv)Cabarets in close proximity to residential uses require an acoustical assessment.

v)The liquor license must be maintained in good standing at all times. If the cabaret’s good standing is lost, then the privilege of a later closing time is lost until such time as the cabaret’s good standing is reinstated.

Pros:

·increases the flexibility for cabaret owners to change formats and add variety to the industry,

·increases the financial viability of the cabarets and should reduce the ‘need’ for cabarets to bend the regulations,

·provides late-night venues for adults to continue to dance and socialize in an approved space for assembly,

·police have statutory right to enter the premises, unlike non liquor licensed dance halls,

·330·similar practices are in place in other provinces (Alberta, Quebec and Ontario),·330

·the possibility that an individual club could lose its late night closing privileges while other clubs continue to operate unhindered will also provide incentive for all club owners to manage their businesses properly,

·if requiring acoustical upgrades as part of the approval process is possible, then issues of noise complaints due to music and other sounds emanating from within the cabaret could be substantially reduced,

Cons:

·closing hours would be extended to a period in the day when policing resources are at their absolute lowest,

·nuisance complaints and problems with club patrons may increase with clubs that are located in close proximity to residential dwellings,

·will likely face opposition for the other liquor license classifications (restaurants, neighbourhood pubs, hotel pub/lounges),

·without a corresponding tightening of enforcement regulations, it may simply result in an extra two to three hours of ‘boozing up’ time.

10.Municipal endorsed entertainment districts and the recognition of unique geographic/demographic characteristics of different areas of the province.

Legislation to provide for specific areas or districts that would have regulations specifically tailored to the needs of that district based on municipal consultation [provided a thorough public process has been undertaken to establish municipal policy for the area].

Pros:

·would assist local governments to establish entertainment districts,

·permits greater flexibility in the application of liquor regulations,

Cons:

·will require greater policy analysis by LCLB staff which may take additional time to process.

11.Liquor Control and Licensing Branch provision to allow licensing of non Coast Guard approved motor vessels for Class ‘A’ Lounges (motor vessel that only has an examination for Pleasure Craft certificate).

A motor vessel liquor license application was recently deferred by Council because of the Police Department’s concern that a motor vessel that does not have a Coast Guard Certificate was eligible for a Class ‘A’ Lounge license based on existing LCLB policy.

12. Lounge areas in restaurants.

The relaxation of liquor regulations controlling the consumption of alcohol in restaurants or the holding bars for the restaurants will have a significant impact for Vancouver. There are approximately 1,600 restaurants in the City of Vancouver, and approximately 950 of these restaurants have a provincial liquor license. It is not known how many of these premises have a holding bar or could accommodate a holding area within their existing layout or through minor alterations. A relaxation that would permit a restaurant to serve liquor without food would, in effect, create a number of small or potentially large de facto pubs. Staff recognizes that there are some potential benefits but the concerns far outweigh the potential benefits.

The existing legislation allows for holding bars in restaurants and staff recommends that this not be considered for expansion until improved enforcement procedures are in place.

13.Letter from Councillor Lynne Kennedy, Chair, Vancouver Liquor Licensing Commission, dated February 20, 1997, to Mr. Ken Vance of the Union of BC Municipalities, Re: Provincial Liquor Policy Review.

Stated Council's position with respect to:

·support for regulation of U-Brews and U-Vins,

·non-support for the licensing of billiard hall establishments,

·non-support for active games or gambling in restaurants,

·non-support (at that time) for the opening of liquor store outlets on Sunday and statutory holidays,

·non-support (at that time) for the use of credit cards at liquor store outlets,

·non-support for the licensing of casinos.

14.That taxation revenue generated by liquor sales be used to monitor and enforce liquor regulations and for treatment and social services related to liquor abuse.

CONCLUSION

Staff recommends that Council adopt the foregoing policies as the City’s position on changes to the Provincial Liquor Licensing Regulations.

* * * * *

(c) 1998 City of Vancouver