Bill 15 – Liquor Control and Licensing Amendment Act

The Liquor Control and Licensing Amendment Act passed second reading yesterday and now moves into committee stage. As noted in a government press release when the Act was first introduced in early-March:

“While a complete re-write of the Liquor Control and Licensing Act is planned for spring 2015, government is adopting a phased-in approach to modernizing the legislation. The first step is to introduce amendments, modernize outdated provisions and reform the current act, which will allow for faster implementation of key recommendations.”

A detailed list of key recommendations can be found in the B.C. Liquor Policy Review Final Report.

Below please find my speech at second reading on this important piece of new legislation.

Today I also popped into the Tuscany Village Metro Liquor store in my riding to pick up some BC craft beer. Coincidentally, Barkerville Brewing Company , located in the City of Quesnel, were on location providing samples of their 18 Karat Ale. I chatted with the proprietor (Russ Ovans) and his daughter (Svea Ovans) about the BC Craft Beer industry. They are pictured in the image above. Barkerville Brewing Company officially opened for business on February 14, 2014, making it one of BC’s newest craft beer brewers.

To begin, I’d like to thank the member from Chilliwack for highlighting so many of the outstanding microbreweries that have spawned in the capital regional district. In fact, there’s a craft beer revolution that started in greater Victoria that’s spread throughout British Columbia.

I have the pleasure to actually have a very good friend who wrote the book on the craft beer revolution, called precisely that. His name is Joe Wiebe, and he’s a constituent in the Victoria region here locally.

The Liquor Control and Licensing Amendment Act is the initial piece of legislation that will bring some needed changes to the distribution of alcohol in our region, in our province. Building on the legislative changes that have occurred over the past decade, the government has recognized that a detailed examination on how liquor is managed in this province is overdue and has stated a number of reforms they intend to bring forward. The legislation before us today takes a first step in instituting some of these changes.

Guiding these proposed reforms was a substantial public consultation that allowed British Columbians to contribute to the report that outlined how B.C. should reform its laws around the sale and distribution of alcohol. This sort of public outreach to determine the direction of public policy helps ensure that a social licence is earned and that trust is created between a government and its citizens. I want to applaud the government’s efforts and, in particular, the member for Richmond-Steveston, who went forward with this consultation process to establish the social licence before instituting or proceeding to bring this legislation forward to us today.

The legislation before us will allow for certain reforms that I believe warrant recognition. I’m pleased to see that by this summer small vendors will be able to sell alcohol at farmers markets. As I understand, these vendors will also be able to provide samples to interested customers. This is a great initiative that promotes small business in the microbrewery and wine industries of our province.

The B.C. Craft Brewers Guild reports that the sale of craft beer in B.C. has doubled in just the past four years, going from 9 percent of all B.C. sales of beer in 2009 to 19 percent in 2013, while the Liquor Distribution Branch reports sales by microbrewers shooting up by 38 percent. This is not without substantial economic impact. The Conference Board of Canada reported late last year that for every dollar Canadians spend on beer, $1.12 is generated for the Canadian economy.

More generally, according to the organization called Conversations for Responsible Economic Development, CRED — this is my favourite statistic — within Canada, more people work in the beer economy than in the oil sands economy. I reiterate that for the record. More people work in the beer economy than in the oil sands economy in Canada — 163,200 jobs in the beer economy, 112,000 direct jobs in the oil sands economy. These are numbers that we should be proud of. B.C., and in particular the capital regional district, has led the way in the craft beer revolution — and the fine wine revolution in the Okanagan — in Canada.

As these changes are rolled out over this year and the next, it’s very important that they are implemented in a responsible manner that makes public safety a priority. My comments to this regard will echo those of the previous speakers. The government has implemented significant changes in the last years that sought to decrease the prevalence of drinking and driving. I hope to see this continue, to take the societal effects of alcohol consumption seriously, even as we introduce some of these necessary changes.

We must also ensure that as these reforms are implemented, we continue to engage the small business communities of this industry. For example, there may be small businesses established under previous legislation that might be affected down the road. Some may be committed to long-term leases in their existing sites. Others may find it difficult to compete if, as is being discussed, grocery stores are allowed to sell beer and wine. As we know, small business is the engine of the B.C. economy, and steps must be taken to ensure the continued success of this sector.

For the most part, my concerns with the legislation before us and with some of the other proposed reforms are that they may negatively impact small businesses.

Change happens. We all recognize that. Updating liquor laws may require that we alter the established order of things. However, by ensuring we have an open and ongoing conversation with those who will be impacted, we can at least try to mitigate the amount of disruption that these changes cause.

Reforms to liquor store licensing may have a large impact on small businesses. The bill before us starts to lay the groundwork for substantial changes in this area, so we must be particularly vigilant in our approach to dealing with these small businesses.

One of the most substantial reforms around liquor licensing that this government intends to introduce is to allow liquor store licences to be bought and sold freely across our province. This will directly impact on how the industry operates, particularly in light of the cap on the number of liquor licences available.

Based on what has been made public so far, this proposed change is likely to considerably increase the value of these licences. Indeed, with the implementation of this reform, it’s conceivable that the buying and selling of liquor licences becomes a market in and of itself, divorced from the local market demand for liquor. This could then result in a situation where, for example, a small retail outlet in, say, Burns Lake sells its licence to a retail outlet in Vancouver.

While there’s nothing inherently wrong with licences moving freely across our province, there is an argument to be made here for fairness in our rural communities. As liquor store operators in small communities suddenly have these very profitable licences, they may decide, in fact, to sell their licences to a business in a larger city. This could then leave the rural community — in my example it was Burns Lake — with liquor stocks well below what the market demand is, based purely on the profitability of a larger market like Vancouver.

I’m also interested in the potential effects of continuing to cap the number of liquor store licences in the province while simultaneously creating a new market for these licences. This approach may impact the government’s flexibility to make necessary corrections in the future. Again, another example — the city of Vancouver is having enormous difficulty issuing new taxi licences because of the lobbying efforts of existing taxi licence holders who want to maintain the status quo and the value of their licences. Conceivably, a similar situation could arise with B.C. liquor stores. This is something that we need to be careful of.

In conclusion, my view is that this legislation contains a number of practical changes to our liquor laws. It’s worth noting that the government intends to have an incremental approach to roll out these proposed changes and that the bill in front of us today introduces reforms that are far from the most controversial. Nevertheless, I think the introduction of this bill allows this House to discuss some of the key principles that should baseline any reform, while the bill itself will help to provide new business opportunities for small business owners across the province.

I look forward to more detailed discussion of the specific elements contained within the bill at the next stage of discussions.