The trend of Canadian consumers and licensees challenging how provincial governments regulate, tax, and sell alcohol is alive and well in 2018. The anticipation in advance of the Supreme Court of Canada’s decision in R. v. Comeau, and the widespread media attention following its release, speaks for itself. From coast-to-coast Canadians are dissatisfied with the regimes in place in their respective provinces that tax and restrict the sale of alcohol. The ink spilled over Comeau tells us something else too: very few Canadians actually understand how the liquor licensing and retail regimes in their respective provinces operate.
Earlier this summer Mr. Justice Boswell of the Federal Court of Canada released his decision in Diageo Canada Inc. v. Heaven Hill Distilleries, Inc., which resolved a trademark and passing off dispute between two significant players in the liquor industry. At issue in Diageo v. Heaven Hill is the similarity in Diageo’s Captain Morgan mark, and Heaven Hill’s Admiral Nelson mark. Both marks are used by their respective owners to identify and market their lines of rum.
Alcohol & Advocacy has previously examined the law of commercial host liability in British Columbia. Today most patrons and employees of licensed establishments are familiar with the concept of commercial host liability: bars and restaurants owe a duty or care to ensure that if their patrons become intoxicated they do not harm themselves or others who come in contact with them. The classic example of a situation where a commercial host will be found liable is when an over-served customer gets behind the wheel, and later harms another user of the road.
The Yukon Party are making headlines again up north by revisiting (from the opposition benches) a plank from their unsuccessful 2016 election platform: eliminating the government markup on locally produced alcohol and allowing producers to sell directly to retailers.
On March 8, 2017 Mr. Justice Kent of the Supreme Court of British Columbia released his reasons in Widdowson v. The Cambie Malone’s Corporation – British Columbia’s most recent decision on commercial host liability. The court found the Cambie Malone’s liable for over-serving a patron who later struck Mr. Widdowson with his truck, causing him severe injuries, including brain damage.
It’s fitting that after a year of significant liquor law announcements, reforms, and court cases coming from across the country, the Ontario Court of Appeal would release a liquor law decision just before the start of the New Year. While the result was unfortunate for the Toronto Distillery Company, and affirms a common practice used by liquor control boards to extract tax revenue from small producers, it does provide food for thought for liquor lawyers from coast-to-coast.
In the 1920s, as Prohibition in Canada was on the retreat, the federal government and each of the provincial governments were in agreement that liquor sales and consumption needed to be tightly controlled. To facilitate this agenda each province created a liquor control board that monopolized the wholesale purchasing, pricing, and retailing of alcoholic beverages under a heavily regulated regime.
In January of this year the Toronto Distillery Company (the “Distillery”) brought an application in the Ontario Superior Court of Justice for a declaration that the levy imposed by the Liquor Control Board of Ontario (the “LCBO”) on the sale of its products at its on-site retail store is unconstitutional. The Distillery’s position is that the “levy” the LCBO charges on all of its products is in substance a “tax” and only the Parliament of Canada or the Legislature of Ontario has the authority to impose taxes.
On August 18, 2016 the Minister responsible for the Yukon Liquor Corporation announced a series of changes to the Yukon’s liquor laws in line with the government’s previous commitment to “modernize and streamline liquor regulations”. In all, 26 regulatory changes were announced that came into effect immediately. The President of the Yukon Liquor Corporation described the changes as improving consumer convenience, reducing administrative processes and clarifying business practices. Laudable goals indeed. The press release and full list of regulatory changes can be found here.
On April 13, 2016 the British Columbia Court of Appeal released its reasons in The Cambie Malone’s Corporation v. British Columbia (Liquor Control and Licensing Branch).