liquor policy

2022 Raise the Bar report reveals uneven liquor policy landscape

Restaurants Canada’s fourth Raise the Bar report has graded each province on how industry-friendly their liquor policy landscape is for bars and restaurants. It found that Alberta scored the highest, while Manitoba and Saskatchewan were among the worst.

This year’s special COVID-19 edition of the report highlights how liquor laws and regulations are helping or hurting hard-hit businesses still rebounding from pandemic losses.

Alberta leads the way

Alberta scored highest with a B+ grade, with “industry-leading liquor licencing regulations and policies governing how alcohol can be bought and sold”. Alberta’s grade rose from a B in the last report in 2019 after the province reduced red tape by more than a third for licensed establishments.

“Alberta continues to be a liquor policy role model by implementing reforms that make selling alcohol easier for bars and restaurants,” said Mark von Schellwitz, Restaurants Canada’s Vice President, Western Canada. “To potentially earn yet another bump in their grade by our next report, Alberta should stay focused on reducing liquor costs for foodservice businesses, continue to cut red tape, and re-introduce a liquor server wage.”

Restaurants Canada noted that it is continuing to work with the Alberta Gaming, Liquor and Cannabis Commission (AGLC) to improve the liquor policy landscape for bars and restaurants. It suggested that Alberta can increase its grade by the next Raise the Bar report by reducing liquor costs for small foodservice and hospitality businesses, continuing to cut red tape for licensed establishments, and reintroducing a liquor server wage.

Uneven liquor policy progress coast to coast

Meanwhile, British Columbia’s grade jumped from a C to a B, largely due to the province implementing a wholesale pricing regime for all liquor licensees.

“This was one of the most impactful policy changes the province made to help liquor licensees survive the pandemic and will certainly help the long-term recovery of British Columbia’s struggling bars and restaurants,” said Restaurants Canada.

“While Alberta still ranks highest for favourable liquor policy conditions, British Columbia has a fair shot at catching up if the province continues to cut red tape and reduce costs for licensed establishments,” said Von Schellwitz. “Bars and restaurants want a better process for ordering non-stocked specialty liquor products, a return of the liquor server wage, and the ability to purchase liquor products directly from other licensees.”

Elsewhere, Ontario rose from a C-minus to C-plus due mainly to bars and restaurants now getting a 10 per cent discount compared to what retail customers pay for wine, spirits, and cider from the Liquor Control Board of Ontario (LCBO).

The most dramatic improvement in this year’s report was seen in New Brunswick, which rose two full grades from a D-minus to a B-minus, earning the title of “Most Improved” province. This was mainly due to Alcool NB Liquor (ANBL) introducing a licensee pricing rebate program for bars and restaurants during the first quarter of 2020 as part of a three-year plan to become more competitive with neighbouring jurisdictions.

In stark contrast, Quebec fell from a B-minus to a C. The report noted that while most other jurisdictions have either introduced or expanded discounted licensee pricing policies in the wake of COVID-19, “the Société des alcools du Québec (SAQ) has so far failed to throw this critically needed lifeline to bars and restaurants”.

In full, here is how each province has performed since 2015:

Survey results reveal difficult road to recovery

Bar and restaurant operators from across the country once again had their say in this year’s Raise the Bar report. Responding to a survey conducted at the start of 2022, they told Restaurants Canada that the policy landscape for operating a licensed establishment has improved in about half of all provinces, compared to before the COVID-19 crisis.

When asked if their businesses were profitable, the vast majority said they were either losing money or barely scraping by.

Nearly four in 10 (38 per cent) said they were operating at a loss just to keep their doors open. About a third of these businesses reported that they will need at least a year for their operations to return to profitability; another third said they will need at least a year and a half to become profitable again; and at least 10 per cent said they are considering closing down for good because their business might no longer be viable.

While all provinces now allow bars and restaurants to sell alcohol with takeout and delivery orders, licensed establishments often struggle with competitive disadvantages that undermine this new revenue stream, said Restaurants Canada. This frustrating predicament was reflected in their survey responses.

In addition, barely half of licensed bar and restaurant operators (51 per cent) said their business has benefited from being able to sell alcohol for off-site consumption.

RELATED: The changing face of alcohol sales

What’s still needed?

Restaurants Canada noted that a silver lining for the future was that the 2022 federal budget included the elimination of the excise duty on low-alcohol beer, which came into effect on July 1.

But it says far more needs to be done.

“The fact that the federal government’s automatic annual escalator on alcohol taxes hasn’t stopped during the pandemic has made conditions worse for bars and restaurants still fighting for survival,” said the association. “Now more than ever is the time for updated laws and regulations reflecting the operational realities of today’s bar and beverage landscape — most critically, liquor pricing and off-site sales policies that even the playing field for foodservice businesses.”

Restaurants Canada is recommending that all provinces either implement or keep in place the following measures:

  1. Make wholesale or discounted pricing available to all liquor licensees, for all types of beverage alcohol products. Licensed establishments now have access to some form of discounted or wholesale liquor pricing in most provinces. But bar and restaurant operators are still paying the same as retail customers, and in some cases even more, when purchasing certain types of beverage alcohol in some provinces.
  2. Modernize liquor legislation to cut red tape and reflect changing market conditions. Outdated laws and regulations that are out of step with modern business practices are still on the books in every province. Liquor rules have not kept pace with evolving market conditions, leaving licensees poorly positioned to survive and thrive in today’s landscape, let alone prepare for the future.
  3. Introduce or preserve a liquor server wage. A wage differential for tipped workers allows restaurateurs to allocate more towards higher wages for non-gratuity earning kitchen staff, who are typically harder to attract and retain.

“Bars and restaurants deserve a fair shot at recovery,” said Restaurants Canada President and CEO Roy Little. “We’re urging policymakers to take a ‘do no harm’ approach when considering new policies that could further derail their transition from survival to revival. They also need a more even playing field. Licensed foodservice establishments are far too often at a competitive disadvantage with government-run liquor stores, craft breweries and other types of liquor licensees, private retailers, and increasingly with third-party delivery services.”

View the full report for full details and information on how the grades and conclusions were drawn.