Liquor Industry Update: November 10, 2022
Dear ABLE BC Members and Industry Colleagues,
Here's what you’ll find in today’s update:
LDB Liquor Wholesale Operations Service Update
Are Electronic Tips Now Considered “Controlled Tips”?
WorkSafeBC 2023 Average Base Rate Premiums
BC Passes Food Delivery Fee Cap Legislation
Temporary Authorization for LPs During FIFA World Cup
Fall Economic Statement
Steele and Vance Sponsorship Opportunities
Save the Date: Upcoming Events and Webinars
Out and About with ABLE BC!
Find all past updates here.
LDB Liquor Wholesale Operations Service Update
We understand some members are still experiencing challenges with their Liquor Distribution Branch (LDB) deliveries.
The LDB recognizes the challenges and disruptions wholesale customers have faced and has apologized for these impacts and for the lengthy recovery period.
The past few months haven't been easy, but we are pleased to share that LDB returned to normal delivery schedules for LDB-stocked product as of Monday, November 7.
Some delays can still be expected during this transition period and in response to any impactful weather patterns. The Wholesale Customer Centre (WCC) will call customers if their shipments are delayed.
Positive progress has been made on non-stocked wholesale products (NSWP) with the majority of orders meeting the order-to-ship timeline of 10 business days. LDB continues to work with partners across the supply chain to resume normal service levels.
Click here to read a memo from LDB.
Please direct inquiries to the WCC at wholesalehelp@bcldb.com or 604-775-0681 or 1-888-775-0681.
We will provide further updates as they are available.
Are you experiencing ongoing service issues with the LDB? We want to know.
Please email details to jeff@ablebc.ca so we can understand what’s happening on the ground in your business.
Are Electronic Tips Now Considered “Controlled Tips”?
We have received many questions from members wondering about tips and payroll taxes. We’ve reached out to labour law experts Ryan Anderson and Mark Bout of Mathews Dinsdale & Clark LLP for their guidance.
Are Electronic Tips Now Considered “Controlled Tips”? – Payroll Tax Implications of Recent Federal Court of Appeal Case
A recent decision of the Federal Court of Appeal has generated considerable attention and concern from employers in Canada’s hospitality and service industries.
In Ristorante a Mano Limited v. Canada (National Revenue), the Court of Appeal upheld a decision which determined that certain tips paid electronically ought to be subject to payroll deductions for the purposes of Canada Pension Plan (CPP) and Employment Insurance (EI) contributions.
Historically, Canada Revenue Agency (CRA) guidance indicated that tips are considered income under the Income Tax Act but may or may not be “pensionable earnings” and/or “insurable earnings” for the purposes of CPP and EI deductions/contributions. Whether or not these deductions/contributions must be made by an employer depends on whether the tips are paid by the employer (Controlled Tips) or paid by a client/customer (Direct Tips).
Controlled Tips are considered part of the wage paid by an employer and must have CPP and EI deductions, as well as income tax deductions. Direct Tips, in contrast, are paid directly by a customer to an employee and do not trigger CPP and EI deductions.
The Ristorante a Mano decision is based on the common circumstance of restaurant customers tipping their servers electronically. Tips received electronically were provided to servers the following business day – referred to as “due-backs” – from the employer.
The restaurant did not consider due-backs to be Controlled Tips so did not make CPP and EI deductions from these amounts. However, a CRA assessment found that such deductions ought to have been made from the due-backs because they amounted to payments from the employer to the employees in respect of their employment. The restaurant challenged that decision and the matter was ultimately heard by the Federal Court of Appeal, which agreed that the due-backs had been paid by the employer and therefore triggered CPP and EI deduction obligations.
In reaching this decision the Federal Court of Appeal held that the relevant test – whether an amount is “paid by the employer” – ought to be given a broad interpretation. The Court determined that when tips came into possession of an employer before being distributed to employees, that is sufficient to find they are “paid by the employer.” The Court’s primary concern was that the amounts came into the employer’s possession (i.e., into its bank account) prior to being distributed by the restaurant to staff.
In this respect, the Court explicitly confirmed that the matter did not concern “the servers’ net electronic tips – an amount that might exceed the due-back because servers retained cash received for restaurant bills”. This creates a complicated result that highlights the fact that the Court did not decide that all electronic tips ought to be subject to payroll deductions.
For example, if a server receives $200 in electronic tips one night, not all of that $200 would necessarily be subject to payroll deductions. If on that same night, one customer paid $45 in cash, plus a $5 cash tip, and the server kept that $50 in cash, the $45 owed by the server to the restaurant could be deducted from the due-back, resulting in a net payment owing to the server in the amount of $155. In this scenario, only the $155 amount (rather than the full $200 in electronic tips) would be subject to payroll deductions.
Setting aside such complications, the decision of the Federal Court of Appeal departs from the longstanding guidance provided by the CRA concerning electronic tips. That advice remains posted on the CRA website, as follows:
A customer includes an amount for a tip when paying the bill by credit or debit card and the employer returns the tip amount in cash to the employee at the end of the shift. In exceptional situations the cash tips could be paid out the day after, for example, if there was not enough available cash on hand
Example 2: Direct tips
You are part of the serving staff in a restaurant. The restaurant owner informs you that if a customer pays by credit or debit card and includes a voluntary tip, the restaurant will return the full tip amount back to you in cash at the end of each shift.
This guidance is inconsistent with the ruling in Ristorante a Mano, and it is currently unclear if the CRA and its auditors will adopt the much more narrow approach articulated in that case – i.e., characterizing electronic tips as Controlled Tips any time they pass through the bank accounts of employers.
In the meantime, employers must be cautious and know that tips received by electronic payment and then transferred back to staff may be considered Controlled Tips and trigger an obligation to make payroll deductions.
For further information on Direct and Controlled Tips and payroll taxes, read this article from go2HR or watch these recent webinars from Restaurant Canada.
WorkSafeBC 2023 Average Base Rate Premiums
WorkSafeBC premiums are set to increase substantially for the hospitality industry in 2023, while LRS rates will remain unchanged.
The average base rates can be found here: 2023 premium rates - WorkSafeBC
Liquor Primaries will no doubt be frustrated at seeing this significant increase in premiums or next year. We are meeting with WorkSafeBC soon to understand the rationale for this increase and will provide more details soon.
BC Passes Food Delivery Fee Cap Legislation
BC has passed legislation permanently capping fees charged by food delivery companies.
The Food Delivery Service Fee Act limits fees for core services that delivery companies can charge bars, pubs, and restaurants to a maximum of 20 per cent.
The act also prohibits delivery companies from reducing driver compensation, ensuring employees and contractors continue to be paid their wages and gratuities.
This legislation is in direct response to advocacy from ABLE BC and the BC Restaurant and Foodservices Association (BCRFA). We are grateful to Minister Ravi Kahlon and the BC government for understanding the concerns of BC's hospitality and liquor businesses and supporting industry as we recover from the COVID-19 pandemic.
Click here to read a letter to Minister Kahlon from Jeff Guignard, Executive Director of ABLE BC, and Ian Tostenson, President of BCRFA.
Click here to read Bill 33 Food Delivery Service Fee Act.
Click here to read the government press release.
Temporary Authorization for LPs During FIFA World Cup
We are pleased to let you know that Liquor Primary establishments have been granted temporary authorization to open early during the 2022 FIFA World Cup, November 20-December 18, 2022.
The Liquor Control and Licensing Board (LCRB) has released Policy Directive 22-15 which announces temporary terms and conditions to permit LP establishments greater flexibility in hosting televised games of the FIFA World Cup. There is no change to the hours of liquor sale and service.
ABLE BC has requested that LPs be allowed to extend liquor service for the FIFA World Cup. We will provide an update should this request be granted.
The temporary terms and conditions apply during the World Cup, November 20-December 18, 2022 and include:
A liquor primary establishment may open to the public for non-liquor service prior to 6:00 a.m. provided there is a minimum of one hour between the end of liquor service the preceding evening and the opening for the soccer game. For example, if the establishment’s liquor service ends at 2:00 a.m. patrons may not re-enter the establishment until 3:00 a.m. at the earliest.
While these terms and conditions are in effect, the requirement for patrons to vacate the premise a half-hour prior to the start of liquor service, as stated on the licence, is repealed.
Minors are not permitted in the establishment during the hours of liquor service unless specifically permitted under the terms and conditions of the liquor licence, but minors are permitted outside the hours of liquor service.
Liquor must be securely stored or supervised by staff to ensure that it is not consumed during the hours when liquor service is not permitted.
The person capacity for the establishment is in effect even outside liquor service hours. Licensees may not, at any time, have more persons in the establishment than the stated person capacity on the licence.
As always, patrons may not bring liquor into the establishment at any time and intoxicated persons are not permitted in the establishment at any time.
These terms and conditions are in place only for 2022 FIFA World Cup games between November 20 and December 18, 2022.
Licensees are not required to apply to the LCRB for approval, but it is recommended licensees check with their local government regarding any restrictions on hours of operation.
Please be advised that licensed establishments are subject to inspection by branch staff and police at all times.
If you have questions, please email the LCRB at LCRBLiquorPolicy@gov.bc.ca.
Click here to read the full policy directive.
Fall Economic Statement
Canada’s Minister of Finance, the Honourable Chrystia Freeland, announced the 2022 Fall Economic Statement on November 3rd, 2022. Some highlights of the statement include:
$1.6 B to Immigration, Refugees and Citizenship Canada (IRCC) over the next six years to address delays in processing applications;
A refundable tax credit equal to 30 percent of the capital cost of investments in clean technologies, including electricity generation systems, stationary electricity storage systems, low-carbon heat equipment, and industrial zero-emission vehicles;
The Sustainable Jobs Training Centre to bring together workers, employers, unions, and training institutions to help 15,000 workers upgrade or gain new skills for jobs in a low-carbon economy; and
The intention to draft legislative amendments to the Payment Card Networks Act to regulate credit card transaction fees for small businesses should industry not come to an agreed solution in the months to come.
More information about the 2022 Fall Economic Statement can be found here.
Steele and Vance Sponsorship Opportunities
Steele and Vance is BC’s newest current affairs talk show airing province wide on ChekTV, Thursday evenings at 8pm.
Hosted by veteran broadcasters Lynda Steele and Jody Vance, it’s an unfiltered, fun, and feisty look at what’s making news and what’s trending here at home and around the world.
The audience is responding! Only two months into the season, Steele and Vance is already reaching over 100k viewers in the Victoria/Metro Vancouver market each week, not including viewers who stream us through the CHEK+ app or on YouTube.
Want to showcase your bar, pub, or liquor store? Maybe a cool member of your team - a dynamic bartender, server, or sommelier? Check out these sponsorship opportunities with Steele and Vance.
MIX COCKTAILS or TASTING SESSION on Set - Pubs, bars, private liquor stores
A cocktail making, full segments in-studio. The Steele and Vance desk becomes a bar!
Sponsorship PER episode $1000
VISIT YOUR AMAZING VENUE - Pubs, bars, private liquor stores
Hosts go to your establishment and shoot a FUN 4-5 minute edited segment for the broadcast.
Segment can feature either a product (tasting/education) - or showcase a staff member, bartender, server, sommelier or owner.
Sponsor offers gift certificate to be awarded to one winner of the show who participates online by following sponsor and show hosts.
Segment will be promoted in show as well as on all social media platforms (reach of over 100k), Instagram, Twitter, and Facebook.
Finished content will be made available for sponsor to use on corporate websites and social media feeds.
Sponsorship PER episode: $2500 + GC value tbd
For more information contact steele@chekmedia.ca
Save the Date: Upcoming Events and Webinars
Reshaping the Workplace with an EDI Framework
Equity, diversity, and inclusion (EDI) are important elements in sustainable labour recovery. But what do these really mean in the workplace context? While businesses are aware of the importance of these elements, many are often unsure where to start.
go2HR and ParriagGroup, a leading EDI firm, have built a webinar to deepen your understanding of EDI and how to reshape the workplace.
What participants can expect:
learn what is generally meant by the terms equity, diversity, and inclusion (EDI)
learn why it is so important from both a people and a business perspective
receive an introduction to the EDI Framework
learn how the EDI Framework can be used
Date: November 24, 2022
Time: 1:00 pm-2:30 pm
Location: Zoom
BC Tourism & Hospitality Conference March 1-3, 2023
The BC Hotel Association (BCHA) and the Tourism Industry Association of British Columbia (TIABC) are excited to announce the 2023 BC Tourism & Hospitality Conference will return March 1-3, 2023.
The 2023 conference will take place in Prince George and will bring an array of unique industry speakers and topics relating to the next chapter of tourism and hospitality within our province.
Click here to learn more.
Out and About with ABLE BC!
Last week, our Executive Director Jeff Guignard was in Victoria for meetings and to speak on a panel at the CSAE BC Network MLA Appreciation Event.
Earlier this week, Jeff guest-lectured about government relations and the role of industry associations at KPU. He also attended the Vancouver Cocktail Week Pre-launch Party.
This week, we’ve been extra busy getting everything ready for SPARK: BC’s Hotel and Liquor Conference! The conference is coming up in less than a week and we are so excited to see our members there!
If you haven’t registered for SPARK yet – what are you waiting for?
Click here to see the full conference program.
Click here to purchase tickets.