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This article provides a quick update on the status of the main Covid relief orders that have been issued by the BC Government over the last year as they apply to wineries and the hospitality industry. 

Many of these orders have already been extended previously. It seems likely that many may be extended further beyond the current expiration dates listed above. It is also possible that some of these temporary orders may eventually be made permanent.

Unfortunately, the Public Health Orders (PHOs) that have been issued in BC in response to the Covid19 pandemic continue to cause confusion for the general public and for affected industries including the liquor and hospitality industry. The following discussion provides an updated analysis for the BC wine and hospitality industry by reviewing the orders and related guidelines. 

Restaurants/Bars/Lounges (including Tasting Bars)

The governing Public Health Order for restaurants, bars and lounges (including winery tasting bars) is now the Food and Liquor Serving Premises and Retail Establishments Which Sell Liquor Order which was issued on December 30, 2020. This Order largely re-stated a previous order but also prohibited the sale of liquor after 8 pm on New Year\’s Eve (the latter change came barely 24 hours before the effective time, causing significant financial loss for affected businesses). This PHO previously required and still requires that nightclubs must close. There are various rules for continued operation for all other premises including:

• Customers must be seated and remain seated except to use the washroom or for initial seating. An exception is made for liquor manufacturers so winery tasting rooms can have customers who are standing at the tasting bar.
• Appropriate separation (generally 2m) of customers or customer groups must be made. Alternatively, can use physical barriers.
• Maximum of 6 people per group at a table or counter. No movement between tables.
• Liquor service must end at 10 pm.
• No dancing, singing, etc …
• Contract tracing info for customers is required.
• Workplace Covid Safety plan required.

There is now a requirement for mandatory masks in all indoor public spaces with some limited exceptions including for the consumption of food and drinks. This requirement was issued under this Ministerial Mask Mandate Order rather than a PHO. As a result, masks are now required for staff and customers unless the customer is seated at a table or counter for the purpose of eating or drinking (i.e. a customer must wear a mask during initial seating or going to the washroom).

In respect of events, a revised Gathering and Events Order was issued on December 24th, 2020. This prohibits a restaurant/bar/lounge from holding any \”events\” until at least February 5, 2021. This would likely prevent any type of special event outside the restaurant\’s normal business such as a winemaker\’s dinner or winery sponsored tasting. I note that this order is confusing and does not adequately define many of the terms used. In addition, much of the guidance related to the order (see Province Wide Restrictions page) is not consistent with the order. The definition of \”event\” is problematic because it seems to encompass any \”gathering\” of individuals for \”private or public\” purposes either \”inside or outside\”. This is a sweeping definition that goes far beyond the normal definition of an event. To make things more confusing, the guidance then lists many types of \”gatherings\” which are supposedly permissible but which may fall literally within the definition (for example, \”going for a walk\” with others is supposedly permissible as long as it does not turn into a \”group of people meeting outside\” – which does not make sense). 

Particularly, I note that in this regard and for the purpose of seating customers, restaurants/bars/lounges are not required to determine whether patrons reside in the same household or bubble. Indeed, the Orders do not prohibit customers from different households from sitting together unless that could somehow be characterized as an \”event\”.

Retail Stores (e.g. On-Site Store, Liquor Stores)

The governing PHO for retail stores including on-site stores in a winery or manufacturer is the Workplace Safety Plans Order which was issued on May 14, 2020. This was supplemented by an additional Workplace Safety Order issued on December 16, 2020. Generally, these orders require the following:

• Workplace Covid Safety plan required.
• Daily health checks required.
• Encouragement of working from home, whenever possible.
• Appropriate capacity planning, protective barriers and customer control measures.

As mentioned above, the requirement for masks is now mandatory in retail stores for both customers and employees under the Ministerial Order. 

Events

The revised Gathering and Events Order (above) prohibits all events of any size until at least February 5, 2021. As noted above, the definition of events is problematic but it likely means that all the types of special events that a winery or manufacturer would normally hold are canceled until at least February 5, 2021. For example, weddings, celebrations, parties, auctions, fundraisers, wine tasting seminars, etc… must all be canceled. The previous 50 person limit for events has been suspended (at least temporarily) and the allowable number reduced to zero (the limit for weddings is 10 people which would eliminate most if not all \’winery weddings\’).

Court Commentary

There has already been some judicial commentary dealing with the confusion associated with these Orders. In a recent case that analyzed the effect of these Orders and family custody arrangements, Mr. Justice Kent of the BC Supreme Court noted that the Orders were confusing and hard to understand. The Justice stated: 

There has been some confusion recently on the content and effects of the recent Public Health Orders (PHOs) that have been issued in response to the Covid19 pandemic. The following discussion attempts to alleviate some of that confusion for the BC wine and hospitality industry by setting out the contents of the actual orders and related guidance and recommendations. 

Restaurants/Bars/Lounges (including Tasting Bars)

The governing Public Health Order for restaurants, bars and lounges (including winery tasting bars) is the Food and Liquor Serving Premises Order which was issued on October 9, 2020. This PHO mandates that nightclubs must close. There are various rules for continued operation for all other premises including:

• Customers must be seated and remain seated except to use the washroom or for initial seating. An exception is made for liquor manufacturers so winery tasting rooms can have customers who are standing at the tasting bar.
• Appropriate separation (generally 2m) of customers or customer groups must be made. Alternatively, can use physical barriers.
• Maximum of 6 people per group at a table or counter. No movement between tables.
• Liquor service must end at 10 pm.
• No dancing, singing, etc …
• Contract tracing info for customers is required.
• Workplace Covid Safety plan required.

The recent verbal PHO (November 19, 2020) has not significantly changed the rules for restaurants/bars/lounges. There is now a requirement for mandatory masks. See Province-Wide Restrictions page.

• Masks required for staff and customers unless customer is seated at a table or counter (i.e. for initial seating or going to the washroom).

In respect of events, the reissued Gathering and Events Order (see discussion below) prohibits a restaurant/bar/lounge from holding any events until at least January 8, 2021. This would prevent any type of special event outside the restaurant\’s normal business such as a winemaker\’s dinner or winery sponsored tasting. I note that for the purpose of seating customers, restaurants/bars/lounges are not required to determine whether patrons reside in the same household or bubble. Indeed, the Order does not prohibit customers from different households from sitting together (although the spirit of the guidance would not encourage this except in certain cases, such as where people live alone or where they are meeting for non-social purposes such as business).

Retail Stores (e.g. On-Site Store, Liquor Stores)

The governing PHO for retail stores including on-site stores in a winery or manufacturer is the Workplace Safety Plans Order which was issued on May 14, 2020. Generally, this requires the following:

• Workplace Covid Safety plan required.
• Appropriate capacity planning, protective barriers and customer control measures.

The recent verbal PHO (November 19, 2020) has not changed the rules for retail stores, other than that the requirement for masks is now mandatory. See Province-Wide Restrictions page. 

• Masks required for staff and customers in all indoor areas.

Events

The recent verbal PHO (November 19, 2020) ordered that all events of any size are prohibited until at least December 7, 2020 (now extended until January 8, 2021). The definition of events is contained in the Gathering and Events Order which was revised and reissued on December 2, 2020 to reflect the verbal order. This Order effectively means that all the types of special events that a winery or manufacturer would hold are canceled until January 8, 2021. For example, weddings, celebrations, parties, auctions, fundraisers, wine tasting seminars, etc… must all be canceled. The previous 50 person limit for events has been suspended (at least temporarily) and the allowable number reduced to zero (the limit for weddings is 10 people which would eliminate most if not all \’winery weddings\’). See Province-Wide Restrictions page. 

In the midst of a pandemic which has caused widespread economic pain for the Canadian wine industry, the SAQ (the Quebec liquor authority) has issued an information bulletin which threatens Canadian wineries outside Quebec with enforcement action if they direct ship wine to Quebec customers. The bulletin is located here: Sale and direct delivery of beverage alcohol products to Quebec. Apparently, this bulletin was also sent directly (in the form of a letter) to certain Ontario wineries.

It should be noted that the issues surrounding the interprovincial shipment of alcohol in Canada are complex and were the subject of a relatively recent Supreme Court of Canada decision, R. v. Comeau, which largely upheld restrictive provincial laws. However, the decision also indicated that provincial laws or rules that discriminate as between \”out of province\” and \”in province\” producers could be held to be unconstitutional. Quebec has such laws/rules in that it permits Quebec wineries to direct ship within Quebec but does not permit \”out of province\” wineries to do so. For more detailed information on the laws and rules related to interprovincial DTC shipment, wineries may wish to consult with a lawyer or, for more general information, subscribe to the Alca Winery Compliance Subscription that is available on our sister web-site.

The issuance of the bulletin by the SAQ is a disappointing development as the Canadian wine industry has been working on initiatives to open the country up to the interprovincial trade in wine for years (see Wine Growers Canada and FreeMyGrapes websites). Indeed, the provinces had committed to increase interprovincial access for the alcohol sector in an Action Plan stemming from the 2017 Canadian Free Trade Agreement and had formed a feasibility group to accomplish this. This action flies directly against the spirit of these efforts. At at time when the Canadian economy needs all the help that it can get, it is sad to see a provincial liquor board take an action that will suppress interprovincial economic activity and actively hurt Canadian wine producers in other provinces. Such actions would be unheard of in France where it is, of course, completely legal to ship wine from one part of the country to another. Unfortunately, it appears that the SAQ, and the Quebec government, is taking a narrow short-term view that will ultimately harm Quebec wine consumers.

The BC Liquor and Cannabis Regulation Branch announced today that its earlier program to allow expanded service areas for liquor licensees (including winery tasting rooms and lounges) is being extended from its current end date of Oct 31, 2020 to Oct 31, 2021. This program allows for larger serving areas (e.g. patios) for licensees in order to accommodate physical distancing requirements and other public health order requirements. The policy directive and details are here: Temporary Expanded Service Area – Extension. This change is obviously good news for licensees who will now be able to plan for expanded service areas to continue through the winter and through the bulk of next year. 

In an open letter to the BC Provincial Health Officer and the BC Government, the members of the BC Technical Advisory Panel on Liquor Policy (\”BTAP\” – a group appointed by the BC government to advise on issues related to the liquor industry) have asked for reconsideration and modification of recent orders made by the Health Officer related to the Covid19 pandemic.

On September 8th, Dr. Bonnie Henry, the Health Officer, ordered all nightclubs and standalone banquet halls to close, ordered music volumes to be reduced, and ordered that all liquor service in all licensees throughout the province must end at 10 pm. BTAP is concerned about both the policy rationale and the devastating economic consequences of these orders, and are particularly concerned about these issues in relation to ending liquor service at 10 PM.

Specifically, BTAP has requested and suggested that government consider the following:

• Extend the end of liquor service from 10 PM to midnight
• Greater enforcement of non-compliant venues and customers, targeting the problem areas directly rather than unfairly affecting good operators
• Provide transparent timelines and/or public health targets so businesses can gauge the long-term effect of any restrictions

Download a copy of the letter.

Full disclosure: I formerly chaired the BTAP Panel and am still a member of the Panel.

A revised Public Health Order was posted this morning (effective yesterday) that fixes the language in the earlier order that prevented customers from standing in a tasting room. The new Order now clearly states that licencees who are manufacturers are not covered by the requirement that all customers must have assigned seats. As a result, customers may stand at a tasting bar in a winery or other manufacturer so long as they comply with the other distancing rules. This is obviously a welcome clarification for wineries during the busy tourist season.

A press release from Global Affairs Canada issued today (Summary of Understanding Between Australia and Canada on Wine) indicates that the federal excise tax exemption for Canadian wine will be eliminated within 2 years. This action comes in partial settlement of a trade dispute launched by Australia against Canada at the WTO which alleged that various Canadian policies and practices were discriminatory against Australian wine and violated GATT rules. 

The practical result of this will be that all Canadian wine (including BC wine) will eventually become subject to federal excise tax (currently levied at a rate of 66.5 cents per litre or just under 50 cents per 750 ml bottle). Prior to this settlement, 100% Canadian wines have been exempt from this tax. The elimination of the tax exemption can reasonably be expected to increase the price of Canadian wines in the marketplace for the end-consumer once it is implemented (i.e. within 2 years).

The progress of this WTO dispute DS537 can be tracked here: Canada – Measures Governing the Sale of Wine. As can be seen here, the WTO Panel is scheduled to issue its Final Report on the dispute in the middle of August. However, this settlement will resolve part of the complaint. It should be noted that the settlement states that it does not \”alter Australia\’s claims with respect to other measures covered by DS537\” (i.e. the other matters covered by the dispute). 

In addition, and as a related part of the settlement, it appears that Nova Scotia and Ontario have also agreed to change certain preferential provincial practices over the next few years such that Australian and Canadian wines will eventually receive similar tax and distribution treatment. Nova Scotia has agreed to eliminate its preferential liquor markup policies for local wines. Ontario has agreed to eliminate preferential rules in both its grocery channel and taxation treatment of Australian wine. Media coverage from Australia also discusses the settlement: Winemakers Cheer Wins Over Canada\’s Trade Barriers.

A revised BC Public Health Order was posted late yesterday which applies to all licensed premises that serve liquor (and which is effective yesterday, July 23 2020). While the bulk of the order is similar to the previous one, it does make some significant changes which may affect certain winery operations:

• Updated August 1, 2020. This part has been revised effective July 31st. Manufacturer licensees are now exempt from the requirement that all customers must be seated. Updated July 28, 2020. Paragraphs 3 and 10 of the Health Order state that all patrons must have a seat and that following any service to a patron at a manufacturer tasting bar, the patron must return \”directly\” to an assigned seat. As such, the text of the Order does not permit patrons to stand at a tasting bar to consume their samples/drinks. Rather, a plain reading of the sections says that they can\’t do so (see paragraph 3). While I have been told that there may have been an \”intention\” to allow patrons to stand at a manufacturer tasting bar so long as physical distancing is maintained, the Health Order does not allow this. Unless the Health Order is modified, it is my view that manufacturers should require all patrons to have a seat (a stool would be ok too) as Health Officers or Liquor Inspectors may expect all patrons to be seated based on the text of the Order. The rules apply regardless of tasting room setup (i.e. whether inside or outside). 
• Group size is still limited to 6 persons. If larger groups arrive, they must be seated separately with mandated physical distancing. Tables cannot be consolidated. 
• There must be sufficient staff to monitor and enforce the physical distancing and seating rules. 
• No singing or dancing.
• There are detailed rules regarding the holding of events including the previous maximum of 50 people. Events can only be held between noon and 11 pm. Maximum of two events per day.
• If live music is part of an event, there must be a physical barrier to separate performers from the audience and a distance of at least 3 m.

Full order is here: Order of the Public Health Officer: Food Service Establishments, Liquor Services & Events

Today is the first day that restaurants, bars and hotels in British Columbia will be able to purchase alcohol at normal wholesale prices. This is an historic change that has been sought by the hospitality industry for decades. It will finally place hospitality customers in the province on a level playing field with retail customers in terms of alcohol pricing (the 2015 changes to the wholesale pricing system left out hospitality customers). The new system will provide critical financial assistance to the restaurant/bar/hotel sector at a time when such assistance is urgently needed due to the devastating economic effects of the pandemic. 

More discussion on the economic implications of the change for manufacturers is here: Implications of BC’s New Hospitality Pricing System for Wineries. This change was part of the recommendations of the Business Technical Advisory Panel, and was implemented due to the hard work of Minister David Eby, the LDB, LCRB and the staff in the Minister\’s office. Thanks are due to all of them.