Vancouver restaurants are bracing for a major increase in their operating costs in 2010.
The average 100 seat Vancouver restaurant use to pay $485 per year as a seat tax. That same restaurant will now be paying $800 for those seats – a 63 per cent increase.
The city pushed for the tax increase in order to accommodate the hiring and training of new liquor bylaw enforcement officers.
“That’s a big issue for the restaurants because what they [the city] are really doing there is creating a bureaucracy,” said Mark Hicken, a Vancouver lawyer and wine law expert.
The proposed business license fee increase will generate approximately $450,000 in business license revenue to pay for the new city employees.
The enforcement officers will be hired in the new year to work in tandem with provincial liquor inspectors ensuring that Vancouver’s restaurants operate as restaurants, not bars.
“That really is a red flag for the [restaurant] industry because then you’d have a team of inspectors whose sole job is to go out and try and discover violations,” said Hicken.
In city council last week Barb Windsor, the Chief License Inspector for Vancouver, played down the restaurant industry’s fears.
“There are some people that have concerns around the increase of the fee, but for the most part the comment was that we were going to send out a goon squad and we’re just looking for enforcement. That’s just not part of it,” said Windsor on Nov. 17.
For Windsor, the issue is the lack of city employees who are out there trying to uphold the vast number of laws that govern liquor service in the city.
“We have nothing in our bylaw right now and we don’t have staff out there. So part of it is to work with the province and work with the restaurant association,” she added.
Windsor continued that, “it’s more around education, around all of our bylaws; the noise bylaw, the smoking bylaw, the provincial regulations, the health regulations. There’s a lot and it is very confusing. It’s not just about enforcement.”
Background to the bylaw
The annual tax of $8-per-seat is part of the newly amended food primary bylaw.
The bylaw was amended by council after a 50 per cent food revenue stipulation caused an uproar among restaurateurs, patrons and the media alike.
Restaurants will swallow the tax increase to pay for the enforcement officers who have the power to hold their businesses in contravention.
With so many regulations to learn and such a short period between now and the Winter Olympics, restaurant owners are concerned that the new bylaw enforcement officers will be given too many responsibilities, especially since they will have the same powers as a Provincial liquor inspector.
These powers include the ability to close restaurants for a time period and issue fines in the range of $7,500 to $10,000 for contravention to the Liquor Control and Licensing Act.
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“It is a lot of power for someone who may not know what they are doing” said Nigel Pike, co-owner of Cascade and Habit, who has supported city council’s desire to update B.C.’s liquor laws.
“Our new inspector is good but the last guy was so new he didn’t know what the hell he was doing. He was learning the game, just like everyone else, but he was still in here stamping his feet.”
The Liquor Control and Licensing Act itself is a massive piece of legislation. Restaurant owners often have to hire consulting firms to ensure that their establishments are acting in accordance with vast number of regulations that define restaurant liquor service.
Bylaw enforcement officers will use interpretative measures to decide if a restaurant is acting like a restaurant.
The bylaw itself vaguely states that restaurants must have, “a ratio of receipts from food sales to liquor sales, that are consistent with a restaurant use.”
For Mark Hicken, this notion is problematic as most of the policies on the Liquor Control and Licensing Act already come from discretion rather than formal law.
“There has been an over-reliance on the use of discretion to create those sorts of policies and that tends to create issues of fairness at the enforcement level,” said Hicken.
“If you have too much discretion sometimes people are served with violation notices when some places aren’t.”