On January 31, 2014, the BC government released its Liquor Policy Review Final Report, which made 73 recommendations to modernize and relax BC liquor laws. Recommendations 11 and 12 in the Report suggests that the current penalties for contravention of liquor laws and regulations be reviewed to ensure that BC’s penalties are appropriate, both in comparison with other provinces and in relation to the size and focus of licensed establishments. On August 29, 2014, the government issued a Discussion Paper for Consultation and invited stakeholders to comment on the Penalty Schedule under the Liquor Control and Licensing Regulation.

In comparison with other provinces, BC falls in the middle with respect to imposing penalties – considerably higher than in Alberta but lower than in Ontario; whether by way of monetary fine or licence suspension. Currently, the range of penalties imposed in BC for a first offence is 1 to 15 days licence suspension and/or fines up to $10,000.

The Discussion Paper identifies various issues to be considered, which may lead to changes to penalties imposed for non-compliance. When the Penalty Schedule was introduced in 2001, the objective was to foster consistency in enforcement actions. While consistency may be laudable, the Discussion Paper recognizes that the penalties outlined in the Penalty Schedule may affect licensees differently depending on the type of licence and/or the size of operation.

Implementation of the Report’s recommendations requires the issue of proportionality in enforcement be carefully considered. For example, a liquor primary licensee must not operate its business at all during a suspension, while a food primary licensee may continue to serve food, just not liquor, while its liquor licence is suspended. Given that a food primary licensee may now serve alcohol without serving food, this will result in inequities in the impact of penalties for these types of licensees. As such, monetary penalties may be preferable to suspensions in the future. The concern will be that such penalties are high enough to represent a true deterrent and not a cost of doing business, without putting smaller licensees out of business.

Interestingly, the Discussion Paper introduces the idea that the cultural make-up of a region of a given business may affect the impact of a fine or suspension imposed on a licensee and how cultural make-up and the stigma and loss of reputation associated with suspensions versus monetary penalties may result in “perceived inequitable treatment.”

Some of the other issues identified in the Discussion Paper include whether:

• additional flexibility in the imposition of penalties is appropriate – both with respect to the penalty imposed by the Liquor Control and Licensing Branch, and with respect to licensees being able to choose between a fine or suspension;
• current penalties are sufficient to promote voluntary compliance;
• the current timeframe of 12 months should be increased to 24 or 36 months when determining whether a second or subsequent contravention has occurred with its resulting higher penalties;
• to introduce variable penalties based on liquor volume purchases from the Liquor Distribution Branch; and
• to introduce monetary penalties for second and subsequent contraventions (which currently require suspensions).

The government has invited stakeholders to provide comments and suggestions regarding the Discussion Paper until September 30, 2014. The full Discussion Paper can be accessed at pssg.gov.bc.ca/lclb/docs-forms/penalty-schedule-consultation.pdf.