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In some parts of the country, customers can’t buy a drink without ordering food, while in others it is illegal to stand up when consuming alcohol, or to take home any unfinished wine in a bottle.JENNIFER ROBERTS/The Globe and Mail

Canada's restaurants and bars say unhelpful and unnecessary liquor regulations are making it tough for them to do business.

A report from Restaurants Canada, the association that represents food service businesses across the country, indicates the price its members have to pay for beer, wine and spirits is the biggest complaint among its members.

The key issue is that restaurants and bars usually have to pay retail prices – and sometimes more – for the alcohol they sell to patrons. In most provinces, there is no way to buy supplies at wholesale prices, as there is in most other industries. That drives up costs for the restaurants and bars, which pass them on to customers.

The issue is detailed in a new "report card" on provincial regulations, released Tuesday by Restaurants Canada and based on a survey of its members. Alberta, which allows competition in liquor distribution and enables wholesale pricing to restaurants and bars, got the highest mark.

There are other complaints beyond pricing, mainly based on what the industry sees as outdated regulation. In some parts of the country, customers can't buy a drink without ordering food, while in others it is illegal to stand up when consuming alcohol, or to take home any unfinished wine in a bottle.

Loosening the rules would help to boost the health of the industry, which the association points out is a huge employer across the country. More than one million Canadians work in tens of thousands of restaurants and bars.

Restaurants Canada president Donna Dooher said the liquor distribution system in most provinces is designed to generate the maximum possible revenue for governments. But if it were modified to give bars and restaurants a bit of a break, it would boost the thin margins in the industry, thus expanding employment and generating taxes in other ways, she said in an interview.

She also noted that different rules in different provinces can make it difficult for national chains to function across Canada. "It is almost like you are operating in different countries."

Alberta's reforms, which brought in a more privatized model for liquor distribution, were initially greeted with much trepidation by some members of the public, Ms. Dooher noted, but they have worked well and should be emulated. "It wasn't as catastrophic as people expected it to be."

Here's the Restaurants Canada ranking of each province.

British Columbia: C+

In B.C., there is no wholesale pricing for restaurant and bar owners, who have to pay retail prices for alcohol to the monopoly liquor regulator. It is particularly frustrating for the industry because private retail liquor stores get a wholesale discount. Some positive recent changes have streamlined rules so food sales no longer have to accompany alcohol.

Alberta: B+

Alberta gets the best mark, thanks to its competitive market, which allows restaurants and bars to buy from the provincial liquor commission or a private retailer, at wholesale prices. Minor concerns include increasing liquor taxes and the need for minimum orders to get those wholesale prices.

Saskatchewan: D+

Liquor licences are relatively simple to acquire in Saskatchewan, and food no longer has to be sold with alcohol. Unconsumed wine can be recorked and taken home. But liquor taxes are too high, the association says, and there are no wholesale discounts from the province's regulator, which has a monopoly on sales.

Manitoba: C

Manitoba has rewritten its liquor laws, so food no longer has to be served with alcohol. It also has flexible rules that allow extended operating hours for liquor sales at special events. But there is no wholesale pricing in the province and the provincial commission has a monopoly on beer and spirit sales.

Ontario: D+

Ontario now allows bring-your-own-wine in restaurants, and kitchens are no longer required in places that serve alcohol. But wait times for licences are too long, the association says, and bar owners also have to pay more for beer than people who buy it in a store – in some cases, 30 per cent more.

Quebec: C+

Quebec is working to reduce some of the antiquated rules that govern sales of alcohol, and it has cut some taxes. There is also a wide selection of brands in the province. But the liquor board – the Société des alcools du Québec – still has a monopoly on sales and there are no volume rebates or wholesale pricing.

New Brunswick: C-

There is a wholesale price for full cases of wine and spirits, but other restrictions hurt the industry. Any establishment with more than 30 seats has to have a kitchen, and patrons can't stand up to consume a drink in a restaurant.

Nova Scotia: C+

The regulatory environment has been loosened to allow some private sector liquor stores, and restaurants and bars get a 10 per cent discount on wine and spirits. But there are anachronisms: The province still has "dry" regions, and every place that serves alcohol must have a working kitchen.

PEI: B-

This is one of just two provinces (the other is Alberta) where restaurants and bars get a wholesale discount on all the alcohol they buy. Still, all booze has to be bought from the provincial liquor commission, and the product selection is limited.

Newfoundland and Labrador: F

A slow and cumbersome licensing system, with supply and regulation concentrated in the hands of a provincial regulator, makes it hard for operators. The Newfoundland Liquor Corp. also has high prices and little choice of product, the association says. Drinks have to be accompanied by food in restaurants.