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Home > Government
Relations > Beverage Alcohol
Deposit
Return System for
LCBO Containers
Premier Dalton McGuinty has announced the establishment
of a deposit-return system for all LCBO containers. Effective
February 1, 2007, retail customers and licensees will pay a deposit
on all LCBO purchases, and receive a full refund when the containers are
returned at The Beer Store. The program would include all glass and plastic
bottles, aluminum cans and TetraPak containers.
In November, 2006, the government finalized a five year contract with
The Beer Store to implement the deposit-return system for LCBO containers.
The ORHMA has outstanding concerns related, but not limited to a need
for increased accountability at The Beer Store, ensuring that licensees
do not subsidize retail customers, increased public health and public
safety concerns, staff time and space limitations for sorting and storage
of containers, as well as concerns related to potential additional costs
for licensees related to pick up or delivery of empty containers, service
fees, and staff time. The ORHMA has met with government officials, and
the government has committee to working with the association to examine
and address operational and cost implications for the industry.
Elements of the contract include:
Customer service requirements
•Customer service standards have been included
in the contract and require TBS to maintain Service On Tap service levels
for licensees. TBS is obligated to provide the same level of customer
service to licensees returning LCBO containers as TBS beer containers,
and TBS will expand its Dispute Resolution System regarding licensee
concerns and complaints.
•Empty containers may be picked up by TBS, returned to TBS by
the licensee, or returned to TBS by a private hauler on behalf of the
licensee. TBS will receive a per container handling fee upon container
recovery. TBS will provide the refund to the party returning the empties
(ie: refund would be paid out to hauler, not to licensee).
•TBS will develop policies regarding the sorting of materials,
and will communicate those policies directly to the LCBO, licensees,
and agency stores.
Deposits
•Deposits will apply to all beverage alcohol
containers sold in the LCBO, through consignment, wine retailers, breweries
and distillery locations, and agency stores, except for 100 mL bottles
(mini-bar bottles and promotional items). Deposits will be paid at time
of purchase and a full refund will be given at time of return to TBS.
•Containers more than 100 mL but less than 630 mL will be charged
a $0.10 deposit, and $0.20 will be charged for all containers over 630mL,
regardless of product or container type.
•The deposit will be added into the shelf price but will be shown
as a separate item (ie: $15 + $0.20 = $15.20).
Handling Fees
• TBS will provide return locations within 1.5
km of LCBO stores with more than 550,000 L (excluding beer and sales
to licensees), except for Queen’s Quay (Toronto) and Bayview Village
(Toronto) which must have return locations within 1 km. TBS will also
establish bulk return centers within 15 km of every TBS store location
for licensees and bulk returns (over 120 containers).
Accountability
•TBS will issue invoices every two weeks to government,
indicating the number of containers recovered and the amount of refunds
dispensed. These reports will be audited and remitted to LCBO for review
and transfer of funds to TBS for both deposit refunds and handling fees.
•As part of the contract a value-for-money audit will occur after
three years of the program operating.
•TBS will include the LCBO container deposit-return program in
its annual report to Waste Diversion Ontario (currently required under
the Waste Diversion Act).
•The government will conduct or authorize customer service audits
and financial audits.
Return Locations
•TBS has to provide return locations within 1.5
km of LCBO stores with more than 550,000 L (excluding beer and sales
to licensees), except for Queen’s Quay (Toronto) and Bayview Village
(Toronto) which must have return locations within 1 km. TBS will also
establish bulk return centers within 15 km of every TBS store location
for licensees and bulk returns (over 120 containers).
Contract Review & Expiry
•After the first twelve months of the program
TBS will have six months to evaluate their level of compliance with
the contract. They will have an additional six months to come into compliance
in those areas. The government retains “step-in” rights
should TBS not come into compliance.
•The contract is for a five year period. There is no automatic
renewal clause in the contract, and after the contract ends the government
retains the right to put out a bid to tender or to issue a contract
to The Beer Store or to any other party.
Public Education
•The government will undertake a two year public education campaign,
expected to cost $7.5 million and funded by the LCBO.
The ORHMA will continue to represent the interests of
the hospitality industry and seek clarification on the announcement. We
will update our members as more information becomes available. For more
information please contact the ORHMA Government Relations Department at
1-800-668-8906.
Updated January, 2007
www.bagitback.ca
Deposit
Return ORHMA letter to
Premier McGuinty November 8, 2006 
Deposit
Return ORHMA Letter to
Premier McGuinty September 8,2006
ORHMA Rejects Proposed Liquor Tax - Bill 53
ORHMA
Call to Action
Owner
Operator Letter to Premier
(word)
Staff
Letter to Premier
(word)
Standing Committee on General Government
City
of Toronto Act - Press Release April 26, 2006
Bill 53 - Letter to Premier
Figure
1:
Annual Foodservice Sales for Canada and Ontario 1998-2005
Figure
2:
Annual Foodservice Sales for the Rest of Canada
and Ontario 1998-2005
Figure
3:
Annual Sales for Full Service Restaurants for
Ontario and the Rest of Canada 1998-2005
Figure
4:
Annual Sales for Drinking Places for Ontario and the
Rest of Canada 1998-2005
Figure
5:
Per cent of Operating Revenue from Alcoholic
Beverages by Province and Foodservice Category 2004
Figure
6:
Operating Margins by Province and Type of Establishment, 2004
Figure
7:
Operating Margins for All Foodservice Types, Canada vs.
Ontario 2001-2004
Figure
8:
Operating Margins for Full Service Restaurants,
Canada vs. Ontario 2001-2004
Figure
9:
Operating Margins for Drinking Places, Canada vs.
Ontario 2001-2004
Figure
10:
Change in Profit Margin with Application of a Municipal Tax
on Full Service Restaurants
Figure
11:
Change in Profit Margin with Application of a Municipal Tax
on Drinking Places
Figure
12:
The Impact of a City of Toronto Tax on Toronto Operators'
Beverage Alcohol Sales and Government Revenues Foregone
The
Gallonage Fee Eliminated
January 16, 2006
Member
Alert
Gallonage Fee Letter from Minister pg.1
Gallonage
Fee Letter from Minister pg.2
Gallonage
Fee News Release
The Gallonage
Fee
Prices to liquor licensees for beverage alcohol can end up being greater
than those offered to the public due in large part to the imposition of
the "gallonage fee". The regular shelf price paid by a consumer
for beer, wine and spirits reflects a myriad of different fees, levies,
mark-ups and taxes imposed by the provincial and federal governments on
a supplier's product. Although licensees do receive a small LCBO discount,
the "gallonage fee" takes away any price advantage.
Although the "gallonage fee" is found in the AGCO's Schedule
of Fees, it is collected by the LCBO and The Beer Store. The tax is a
based on volume for beer and price for wine and spirits:
• $2.64 per hectolitre of beer purchased for sale or consumption
under the license; and
• the amount equal to 12% of the purchase price of wine and spirits,
including the price of containers, purchased for sale or consumption
under the license.
The ORHMA calls on the Government to eliminate the gallonage
fee immediately and in its entirety.
ORHMA relieved LCBO and OPSEU reach agreement
Press Release July 27, 2005
Bring Your
Own Wine
and Take Home The Rest
Amendments to the Liquor License Act permitting patrons to bring their
own wine into restaurants came into effect on January 24, 2005. The legislation
permits restaurants and hotel/motel banquet rooms with a liquor sales
license to apply to the Alcohol & Gaming Commission of Ontario for
an endorsement. Patrons may bring a bottle of commercially-made wine into
participating restaurants or banquet rooms. Participation in BYOW is voluntary.
For the first year of the program endorsements will be available free
of charge.
Licensees are free to set house policies which may include
appropriate corkage fees, whether to limit the days on which BYOW is available,
whether to require a minimum food order or to limit the number of bottles
of wine patrons may bring with them.
The legislation also permits licensed establishments
to offer Take Home The Rest (THTR). Participation in THTR is optional.
Licensees may re-cork a partially consumed bottle of wine, ensuring the
cork is flush with the top of the bottle, to allow the customer to take
the wine home, whether the patron brought the bottle of wine into the
establishment or purchased it from the restaurant. Unlike BYOW, THTR does
not require an endorsement and is not restricted to restaurants and banquet
rooms.
Both BYOW and THTR apply only to commercially-made wine.
It is important to note that 3 other amendments to the
Liquor License Act were contained in the same piece of legislation and
are now all in effect as well.
• Doubling the minimum fines for offences related
to liquor and underage persons. The minimum fine for a licensee has
increased from $500 to $1,000, and for a non-licensee from $100 to $200.
• Creating new offences for failing to leave
a premise when required to by a police officer, or for returning to
a premise the same day after being asked to leave by a police officer.
• Allowing the Registrar of Alcohol and Gaming
to immediately suspend a liquor licence where there is a threat to public
safety, a power previously held by the Board.
ORHMA
Submission to Standing Commitee on General Government
(December 6, 2004)
Website Links
Alcohol and Gaming Commission of Ontario
www.agco.on.ca
Sandy's
Law Warning Sign Poster
MANDATORY Alcohol Warning Sign
Due to amendments to the Liquor License Act, effective February 1, 2005
ALL licensed establishments are required to post signs warning that consuming
alcohol during pregnancy may result in Fetal Alcohol Syndrome.
The warning sign must be at least 8 by 10 inches in size.
It must be prominently displayed in all locations where beverage alcohol
is sold or served. Failure to comply with the signage requirements is
an offence under the Liquor License Act.
All restaurants and bars licensed to sell and serve beverage
alcohol, all retail stores permitted to sell beverage alcohol (i.e., LCBO,
The Beer Store, wine, beer and spirits manufacturers’ stores), and
licensed brew-on-facilities are required to post the warning signs.
The signs must be posted in English and may be posted
in French, and may be displayed in colour or in black and white.
These signs are available free of charge at www.agco.on.ca
Alcohol Warning Sign www.agco.on.ca/en/b.alcohol/warningsign.html
Beverage Alcohol System Review
Government Releases Beverage Alcohol System
Review Panel Report
In June, 2005 the Beverage Alcohol System Review Panel
released its report to government recommending major changes to Ontario’s
beverage alcohol system.
The ORHMA had called for, and welcomed the establishment
of the Panel. The ORHMA had the opportunity to make a presentation and
submitted a comprehensive package of proposed reforms to the Panel as
well as to the Ministry of Finance, and was pleased to see a number of
comments and recommendations reflected in the report.
The final conclusion of the panel, and
the primary recommendation in the report, is that that in order to create
an open and competitive system, and to maximize government revenue and
protect social responsibility and other public interests, the government
withdraw from all retail and wholesale operations of beverage alcohol.
The panel recommended that the government sell, via auction, licenses
to operate the retail and wholesale operations of the LCBO. The government
immediately rejected this recommendation.
There were a number of other recommendations of specific
interest to the hospitality industry.
The panel recommended a redesign of the beverage
alcohol taxation system, including the establishment of a flat
per litre charge. The Minister of Finance stated his intention to turn
his attention to reviewing the current taxation structure related to beverage
alcohol. The ORHMA will continue to push for the elimination of the gallonage
fee.
Mirroring the recommendations of the ORHMA, the Panel
recommended the government move quickly to reform the AGCO hearings
process for liquor license violations to ensure more
timely enforcement and meaningful sanctions. The panel cites the creation
of progressive or staged sanctions which could include, for example, automatic
written warnings or fines for first offences instead of the hearings process.
These were key ORHMA recommendations.
The report also recommends more effective legislation
and enforcement responses regarding drinking by minors.
The ORHMA also recommended the government permit the
tourism industry to sell all-inclusive travel packages.
The panel recommended that the government include this proposal throughout
the pending review of the Liquor License Act.
The ORHMA has discussed the implementation of the report
and the pending review of the Liquor License Act with the Minister of
Government Services, the Honourable Gerry Phillips, and his staff. The
ORHMA has also requested a formal meeting with both the Minister of Government
Services and the Minister of Finance.
ORHMA
Submission to the Beverage Alcohol System Review Panel()
To view a copy of the ORHMA submission on Fines vs. Suspensions, please
visit the Members’ Only section
Liquor License
Act Review
The Minister of Consumer and Business Services has indicated his intention
to review the Liquor License Act.
While the Beverage Alcohol System Review's mandate is
to examine Ontario's beverage alcohol distribution system in its entirety
and to make recommendations to government, the Liquor Licence Act Review
focuses specifically on the Liquor Licence Act and its regulations and
the Alcohol and Gaming Commission of Ontario (AGCO) as its vehicle for
implemetation. The first round of the review process resulted in earlier
amendments to the Liquor Licence Act, among them the Bring Your Own Wine.
Under the authority of the Ministry of Consumer and Business
Services, a broad review of the Liquor Licence Act and regulations will
continue after the Beverage Alcohol System Review panel submits its recommendations
to the Minister of Finance. Consultations with key stakeholder groups,
including the ORHMA, will reconvene in the Fall of 2005. The scope of
discussions will be “fairly open-ended” but the Ministry will
prepare specific topics for stakeholder input (this does not mean that
stakeholders cannot introduce issues other than those presented by government).
The Ministry will not be entertaining issues such as extending the hours
of sale and service for licensed premises or the legal drinking age.
The guiding principles for the Review entail:
• Enhancing public safety
• Reducing administrative burden to liquor licensees and
• Increasing consumer choice
The ORHMA will be participating as a key industry stakeholder, actively
engaging in the stakeholder discussions and representing the interests
of the hospitality industry.
Website Links
Alcohol and Gaming Commission of Ontario
www.agco.on.ca
(Updated July, 2007)
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