7-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London v. Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019, 2022 CanLII 20142

Date: 2022-03-11

Appeal from a Notice of Proposal to Review an Application for a Liquor Licence under the Liquor Licence Control Act, 2019, S.O. 2019, c. 15, Sched. 22

Between:

7-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London

Applicant

-and-

Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019

Respondent

-and-

Dan Dignard

Objector/Added Party

Decision and Order

ADJUDICATOR: Colin Osterberg, Member

APPEARANCES:

For the Appellant: Will Shaw and Jonathan Andrews, Counsel

For the Respondent: Rena Khan, Counsel

For Added Party: Lauren Pearce and Caroline Jones, Counsel

Heard by Videoconference: February 1 & 2, 2022

OVERVIEW

17-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London (the “appellant”) applied for a licence to sell alcoholic beverages pursuant to s. 6 of the Liquor Licence Act, R.S.O. 1990, c. L.19 (the “LLAct”) at its 7-Eleven store located at 72 Wharncliffe Road North, London Ontario (the “Premises”).

2The Registrar under the Alcohol and Gaming Commission of Ontario Act, 2019 (the “Registrar”) gave notice of the application to residents of the municipality in which the Premises are located. The Registrar received objections from 45 people. As a result, the Registrar issued a Notice of Proposal to Review an Application for Licence (“NOP”) under s. 21 of the LLA. The appellant appealed the NOP to the Tribunal and a hearing before the Tribunal took place February 1 and 2, 2022.

3The objectors, including the added party, opposed the appellant’s application for several reasons: they say that convenience stores and fast food restaurants should not be allowed to sell alcohol; they are concerned that the sale of alcohol at the Premises will result in harms to the community including increasing intoxication, underage drinking, violence, and drunk driving; they do not believe that the appellant will serve alcohol in accordance with the law, regulation, and responsible practices; and they are concerned about the sale of alcohol in a location where unaccompanied minors might be present.

4After considering all of the evidence presented, I have concluded that the appellant’s application should be granted.

THE LAW

5The Liquor Licence and Control Act, 2019, S.O. 2019, c. 15, Sched. 22 (the “LLCAct”) came into force on November 29, 2021 and repeals and replaces the LLAct. In accordance with the transitional provisions in Ontario Regulation 767/21, the appellant’s application for a licence is deemed to have been made under the LLCAct. The NOP is continued under s. 25 of the LLCAct.

6Section 8(1) of the LLCAct provides that the Registrar shall issue a licence to an applicant if the applicant, among other things, complies with the LLCAct, the regulations and the standards and requirements established by the Registrar, and is not ineligible to be issued a licence.

7Section 3(6) states that:

(6) The Registrar shall not issue a licence to operate a liquor consumption premises or a licence of another prescribed category or prescribed class within a category if issuing the licence is not in the public interest, having regard to the needs and wishes of the residents of the municipality in which the premises to be licensed are located.

8The LLCAct requires the Registrar to give notice of a liquor licence application to the residents of the municipality in which the premises are located (s. 7(1)). If the Registrar receives written objections, it may issue a proposal to review the application and the applicant may then request a hearing by the Tribunal to determine whether or not the licence should be issued and whether conditions should be attached (s. 26(1) and (4)). After the hearing, the Tribunal may direct the Registrar to issue the licence or to refuse to issue the licence (s. 26(3)). If the Tribunal directs that a licence be issued, it may impose any condition on the licence that it considers proper to give effect to the purposes of the LLCAct (s. 26(5)).

9The onus is on the added party to prove on a balance of probabilities that it is not in the public interest, having regard to the needs and wishes of the residents of the municipality in which the premises are located, to grant a licence to the appellant.

10The good faith concerns of the residents in the immediate area of the premises at issue who are the most affected by the proposed licence will be given greatest consideration as compared to those who are less directly affected. In determining whether the needs and wishes of the residents are presented on a good faith basis, the Tribunal will look at the totality of the evidence to determine if the subjective concerns and fears of the residents are supported on a valid, objective basis.

11In making its decision, the Tribunal is required to balance the appellant’s qualified right to a licence against the needs and wishes of the residents of the municipality.

ISSUES

12The first issue to be determined is whether the added party has established, on a balance of probabilities, that the issuance of a licence to operate a liquor consumption premises to the appellant is not in the public interest, having regard to the needs and wishes of the residents of the municipality in which the premises are located.

13If the licence is granted, then the second issue is whether, in the circumstances of this case, conditions should be attached to the licence.

EVIDENCE AND ANALYSIS

The Premises

14The Premises is currently being operated as a convenience store and gas bar. It carries products typical of many 7-Eleven locations including groceries, snack products, lottery tickets, cigarettes, and gas. It also offers a limited variety of meal items such as hot dogs, sandwiches, and fried foods. Although the precise layout of the Premises should a licence be granted has not been finalized, the appellant intends to offer an increased menu of meal items, all of which can be described as fast-foods, and to designate an area of the store as a restaurant which would be separated from the grocery area by a half-wall and which would consist of two tables-for-two and six window-bar seats. The food will be prepared behind a counter located along the front of the store. Customers will place their order at the counter and carry their food and drinks to their seats. Alcohol will be kept in a cooler behind the counter which will only be accessible by staff.

15According to the evidence presented by the appellant, the staff at the Premises will be able to view the restaurant area from their position behind the counter and alcohol will not be permitted outside the designated food-service area. The Premises have large windows which allow staff to monitor the parking lot. The windows also allow persons outside the store to see what is going on in the Premises which the appellant says enhances the safety of those inside. The store is well-lit and there are monitored security cameras inside and outside the Premises.

16There was limited evidence presented at the hearing with respect to the neighbourhood around the Premises. The Premises are located at 72 Wharncliffe Road, near its intersection with Mount Pleasant Avenue in London. Wharncliffe Road is a busy street and the photographs submitted show that the Premises are located next to a large night club. There is a convenience store, licenced restaurant, and gas station across Mount Pleasant Avenue to the north, and another licenced restaurant to the east across Wharncliffe Road. The photographs in evidence show other businesses in the area as well.

17According to the added party, there are schools in the area including London Christian Academy and Jean Sauvé French Immersion Public School, both of which are within a kilometer of the Premises, but there was little evidence presented about the character of the neighbourhood other than that there is some student housing in the area. Western University is approximately 3-4 km from the Premises.

The objectors

18The objectors who testified at the hearing, including the added party, are all members of the Ontario Public Service Employers Union (“OPSEU”). The added party works with the Ministry of Labour. Robin Reath, Michael Cassalotto, and Alex Waterson, work for the Liquor Control Board of Ontario (“LCBO”). Kristina Lansbergen works at Huron College which is affiliated with Western University. All the objectors who testified hold executive positions with OPSEU. None of the objectors live in the immediate area where the Premises are located, although some of them occasionally stop there to buy coffee or gas on their way to work.

19The objectors acknowledge that OPSEU has campaigned against the private sale of alcohol in convenience stores and grocery stores for several years. OPSEU is funding the added party’s legal costs as well as the cost of the expert witness who presented evidence at the hearing. None of the objectors who testified said they would be personally affected if the Premises were to be licensed. While not suggesting that there is anything wrong with these arrangements, and without doubting the sincerity of the concerns expressed by the objectors, the lack of evidence presented at the hearing as to the needs and wishes of the residents who will be directly affected by the issuance of the licence is relevant to the Tribunal’s determination. As discussed below, many of the objectors’ concerns are general in nature, and could be applied to the licensing of any premises in any location, rather than reflecting the concerns of residents who might be directly affected by the licensing of the Premises at issue in this appeal. It is the latter that are of primary relevance to the Tribunal.

20The evidence presented with respect to the person with the most proximity to the Premises was that of Mr. Hubert Krygsman. Mr. Krygsman is the principal of London Christian Academy, a school located several blocks from the Premises. Mr. Krygsman did not submit an objection to the proposed licence. He did not appear at the case conference or the hearing. The only evidence from Mr. Krygsman comes by way of an email he sent to the objector’s lawyer. The email is dated January 7, 2022, and states that prior to COVID, grade 8 students from the school would frequently visit the Premises at lunch. Mr. Krygsman’s letter says that, if a licence is granted, his students would no longer be permitted to visit the Premises.

21There was no evidence presented as to how many students would be affected or what Mr. Krygsman’s specific concerns were. There is no evidence that Mr. Krygsman has any specific information about the intended use of the Premises, the safety measures being taken by the applicant, the intended hours of operation, or any other details about the licence or the appellant’s operation. Although it may be reasonable to assume as much, Mr. Krygsman’s letter does not state that he considers that issuing a licence for the Premises would not be in the public interest or that he, or the London Christian Academy, is objecting to the licence. I am prepared to accept the letter as some evidence that at least some nearby residents may be negatively impacted if the appellant were to be granted a liquor licence. However, without more details about Mr. Krygsman’s concerns or the information about which he was aware at the time of writing, and absent the opportunity for the appellant to examine him at the hearing, I find Mr. Krygsman’s evidence to be of limited assistance in determining whether issuing a licence is in the public interest.

22Dan Dignard, the added party, lives in north London, about 7 km away from the Premises. He lives with his wife and two sons ages 23 and 17. The added party has driven by the Premises and has stopped there to buy lottery tickets and gas several times over the years.

23Robin Reath lives in north London about 7 kms from the Premises. He works at an LCBO retail store located about 5 kms away.

24Kristina Lansbergen works at Huron University College which is part of the campus at Western University. She lives across town from the Premises and stops there to get gas occassionally on her way to work. She pays for her gas at the pumps and does not go inside the Premises.

25Alex Waterston is an LCBO warehouse employee and lives about 5 kms from the Premises. He has two children ages 19 and 17. Mr. Waterston says that he has been to the Premises a number of times. He used to drive by the Premises when taking his children to Jean Sauvé elementary school when they were young, and he sometimes used a nearby parking lot when he attended Labatt Park for baseball games. He did not give evidence as to when he was at the Premises last.

26Michael Cassalotto works at a downtown London LCBO retail store. He lives in the south end of London about a 15-20 minute drive from the Premises. He says he regularly attended bars in the area when he attended Western University several years ago and is familiar with the area.

27Dr. Timothy Stockwell, a resident of British Columbia, testified as an expert witness at the hearing. The parties agreed that Dr. Stockwell should be allowed to present evidence at the hearing in order to provide an objective foundation for some of the objectors’ more anecdotal concerns about the appellant’s application for a liquor licence. Dr. Stockwell is a scientist at the Canadian Institute for Substance Use Research and is a professor in the psychology department of the University of Victoria, British Columbia. Dr. Stockwell’s education and experience in the field of the causes, effects, and harms of substance use is extensive and he is eminently qualified to give expert evidence in those areas.

28Dr. Stockwell has never been to the Premises. He did no independent analysis of the area where the Premises is located and has limited knowledge of the surrounding community, including the presence of residential neighbourhoods or schools. He is aware of some of the Premises’ surroundings based on Google Maps screenshots provided to him by the lawyer for the added party, but was not able to provide many details about the neighbourhood or community and in particular what the needs and wishes of the residents might be. Dr. Stockwell’s evidence is therefore of limited value when assessing what impact the granting of a licence at the Premises might have.

Discussion regarding objectors’ concerns

29The LLCAct does not direct the Tribunal to determine whether or not the private sale of alcohol in Ontario is in the public interest or whether convenience stores ought to be permitted to sell alcohol. Section 26 of the LLCAct defines the powers of the Tribunal and limits those powers to directing the Registrar to either issue or refuse a licence. The Tribunal is not empowered to direct the Registrar to take any action that the Registrar is not authorized by statute to take, and this includes determining to refuse liquor licenses on the basis that convenience stores and fast food restaurants ought not to sell alcohol.

30In deciding the present appeal, I will consider whether the added party has established that the ills they say will result from the private sale of alcohol in this location, a convenience store, will have a negative impact on the public interest, having regard to the needs and wishes of the residents of this municipality.

31The Tribunal has consistently held that the public interest provision in the LLAct, now s. 3(6) of the LLCAct, should be read such that the Tribunal’s enquiry is to be focussed on the public interest as it relates to the impact of the licence on the residents of the local municipality, with the concerns of the residents in the immediate area of the premises at issue who are the most affected by the proposed licence given greatest consideration as compared to those who are less directly affected. As the Tribunal stated in Powerhouse Corporation v. Registrar of Alcohol, Gaming and Racing¹:

The use of the words “public interest” in this subsection does not give us a mandate to embark on a far-reaching consideration of the public interest as a general concept.

32This approach was upheld by the Divisional Court² which stated at paragraph 52 of its decision:

It is evident that the full definition of “public interest” in s. 6(2)(h) of the Act represents a legislative intent to narrow the interpretation of those words in that provision…The legislature must be presumed to have made a deliberate choice to circumscribe the latitude of “public interest” in s. 6(2)(h) by adding the wording that immediately focuses attention on the “needs and wishes of the residents of the municipality in which the premises are located.”

33I note that ss. 40 and 41 of Regulation 746/21 specifically contemplate that licensed premises may include, or be located in, a convenience store. In my view, it is not for the Tribunal to order the Registrar to refuse to issue a licence on the sole basis that an appellant is a convenience store. I do not therefore intend to consider the wisdom of the policy choice of allowing private alcohol sales in Ontario, without regard to the needs and wishes of the muncipal resident. Instead, I will conisder whether the objector has established that the harms they say will result from alcohol sales in convenience stores will in fact happen here, and that they result in a conclusion that the licence is not in the public interest, having regard to the needs and wishes of the muncipal residents.

34The objectors’ concerns were considered by the Tribunal as follows.

Convenience stores should not be allowed to sell alcohol

35The objectors all express a general dislike for the sale of alcohol in convenience stores and fast food restaurants. They argue that allowing the sale of alcohol for on-premise consumption at this location will result in the creation of a “slippery slope” toward allowing the sale of alcohol in all convenience stores and fast food restaurants in Ontario.

36The objectors are concerned that, because the Premises are a convenience store, as opposed to a restaurant, customers will be in the store for only a short time and, if they are there to buy food they are looking for a quick bite to eat rather than a sit-down meal. The objectors worry that this will encourage increased intoxication as well as drinking and driving.

37Dr. Stockwell supports these general concerns. He says that the combination of a convenience store and a premises licensed for the on-premises consumption of alcohol is unusual and the scientific literature on the subject is “non-existent”. His opinion draws from the scientific literature concerning restaurants and bars. One of Dr. Stockwell’s major concerns is that granting this licence will eventually result in alcohol becoming available in thousands of convenience stores and fast food restaurants across the province. He described that prospect as “death by a thousand cuts”. This one location obtaning a liquor licence may not be very significant, according to Dr. Stockwell, but when the private sale and service of alcohol is permitted all over Ontario, it will result in extremely negative consequences.

38I am not satisfied in the context of this application, that Dr. Stockwell’s concerns regarding the dangers of the future proliferation of the licensing of similar locations rise to the level of demonstrating that this licence is not in the public interest, having regard to the needs and wishes of the residents of this municipality.

39I also find that the concerns expressed about the length of time people are likely to spend eating in the Premises as compared with what the objectors consider to be “real restaurants”, are speculative and unsupported by any objective evidence. There is no evidence to suggest that persons who stop for a quick bite to eat are more likely to become intoxicated or will be more likely to drink and drive than persons who attend other restaurants where alcohol is served. It could just as easily be argued that the longer a person remains in a licensed establishment, the more likely that person is to become intoxicated. Further, the appellant says that it intends to restrict the sale of alcohol to persons who purchase food. There are no similar restrictions in most restaurants where customers are generally permitted to drink alcohol whether or not they order food.

Increased community harms associated with drinking

40The objectors argue that adding a venue where alcohol is served in this area will increase the use of alcohol in the community, make it easier for underage persons to obtain alcohol, increase the incidences of violence in the area, and will increase the occurrence of intoxicated driving. The objectors argue that the community where the Premises are located already has an adequate number of locations where alcohol is served and does not need another licensed establishment.

41Dr. Stockwell testified that the most important factors affecting the consumption of alcohol are price and availability. He referred to studies which have found that alcohol consumption in a community increases with every additional location where alcohol can be purchased and that consumption also increases as prices decrease. He notes that price generally decreases based on the level of competition in an area. Dr. Stockwell says that consumption of alcohol, underage drinking, violent incidents, and intoxicated driving, all tend to increase along with availability. He also says that there are a sufficient number of licensed premises in the area to meet the needs of the community.

42I find these concerns to be speculative and unsupported by objective evidence in terms of their application to the licensing of the Premises. There was no evidence presented at the hearing about the number of licensed locations relative to the number of residents in proximity to the Premises or how an additional 10 seats where alcohol is served may impact the consumption of alcohol, the price at which alcohol may be purchased, or the resultant community harms in this municipality. There was no evidence presented by the objectors or Dr. Stockwell in support of their allegation that there are a sufficient number of licensed premises in the community already.

43Moreover, I find that these concerns expressed do not address the issue that is the subject of this appeal – that is whether the licensing of these premises are not in the public interest, having regard to the needs and wishes of the residents of this municipality The concerns expressed amount to an argument against the licensing of any additional licensed establishments and do not focus on the needs and wishes of the community related to this licence application.

44In addition, the objectors and Dr. Stockwell say that the sale of alcohol at the same location where a gas bar is located is a bad idea and that it will encourage intoxicated driving. It is suggested by the objectors and Dr. Stockwell that persons might go into the Premises for a quick drink when they are finished filling up with gas if they are given the opportunity to do so.

45This is speculative, unsupported by evidence presented at the hearing, and, in my view, unlikely. There are often gas stations near licensed restaurants and, in fact, a gas station and convenience store share the same lot as a licensed restaurant right across the street from the Premises. There was no evidence presented at the hearing that the proximity of gas stations to licensed premises tends to increase the occurance of drinking and driving.

The alcohol serving practices of the appellant

46The objectors expressed doubt that the appellant will have staff who are adequately trained to ensure compliance with the law regarding the sale of alcohol and to deal with difficult situations the presence of alcohol for sale on the Premises may entail. The objectors believe that the staff at the Premises will generally be young, low-paid, inadequately trained, and often will be working alone. Dr. Stockwell supports these concerns, and states that age verification and regulatory compliance of private sellers of alcohol is less robust compared with government owned stores.

47While I accept that age verification and regulatory compliance is generally less robust, I am not satisfied that the objectors have established that this applies with respect to this location such that issuing this licence would not be in the public interest.

48The objectors, and Dr. Stockwell, agreed that they have a limited knowledge of the Premises and its staff and only a cursory understanding of the policies and procedures the appellant intends to implement should the Premises be licensed to sell alcohol. Information packages were made available to the objectors and the public with respect to these policies and procedures, but almost all of the objectors either did not read them closely or could not recall receiving them. Dr. Stockwell has not reviewed the policies and procedures.

49According to Daniel Douven, the area manager responsible for the Premises, the average age of the staff at the Premises is approximately 30 years old. Normally there are two or three staff members working at a time. At times there are four employees working and on Monday and Tuesday nights there is one. Mr. Douven says that employees receive at least 40 hours of training when they are first hired. The appellant presented the material it uses to train its employees in the subjects of the sale of regulated products, health and safety, and violence and robbery prevention. It also submitted its draft compliance plan with respect to the sale of alcohol, which details the appellant’s plans with respect to the service of food and alcohol, age-verification for the sale of alcohol, compliance with the LLCAct and Regulations, and food safety.

50The evidence demonstrates that the appellant has training programs and policies in place and that the concerns of the objectors and Dr. Stockwell are not supported by an objective review of the evidence. The objectors and Dr. Stockwell agree that they have, at best, a limited familiarity with the appellant’s policies with respect to the compliance with the law and responsible sale of alcohol.

51The objectors express concern for the safety of the staff working at the Premises. They say that the combination of the presence of alcohol at the Premises and the appellant’s young staff working alone create easy and attractive targets for crime which will put staff in danger. The objectors note that there is a large, wild, country bar next to the Premises and are concerned that intoxicated patrons of that bar will go to the Premises looking for alcohol which will present dangers to the staff working there.

52The objectors’ concerns are not supported by evidence. As noted, the average age of its staff at the Premises is approximately 30 years old and they rarely work alone. The employees are equipped with personal safety devises which are monitored remotely. The Premises has video surveillance in place. There is no evidence that the Premises have been subject to regular criminal behaviour or that it has been the target of intoxicated patrons of the nearby country bar in the past. Mr. Douven testified that the Premises has not been the subject of a robbery since 2013 and he is not aware of any violence that has occurred at the Premises.

53I find that the objectors’ concerns in this regard are unsupported by the evidence.

Underage customers and children

54The objectors said that there are large numbers of university students in the area, some of whom are underage, and that the Premises are frequented by many children who are under the drinking age.

55The only objective evidence with respect to the presence of unaccompanied children in the premises was that of Mr. Douven who says that about 10 unaccompanied minors attend the Premises a day on average. While I accept that children probably attend the Premises unaccompanied, the objectors did not point to any specific concerns that they might have in that regard. There was no evidence presented at the hearing which suggested that the appellant will not comply with the law or that unaccompanied children would be at risk should they enter the Premises. The appellant will be required to operate in accordance with the law, which includes not serving customers to intoxication and it has procedures and policies in place to do so.

56With respect to the prospect that underage persons, including university students, might be able to obtain alcohol at the Premises, the evidence does not satisfy me that this is any more likely to occur at the Premises than anywhere else alcohol is served.

57The appellant presented evidence that it has experience with the sale of age-regulated products including cigarettes and lottery tickets. If it is licensed to sell alcohol, its staff will undergo the required government-mandated training (SmartServe) as well as additional training similar to that provided to its staff for age-verification with regard to other regulated products. The appellant has a policy in place requiring that government issued identification be reviewed and scanned for anyone who appears to be under the age of 30. The appellant regularly audits stores to ensure that its policies with respect to age-restricted products are followed and it described the consequences to staff members, store managers, and area managers which result from a failure to comply with those policies.

58Again, the appellant is required to comply with the law, which includes not selling alcohol to minors and the added party presented no evidence to support its concern that the appellant will not comply with the law in that regard.

CONCLUSION

59I must balance the needs and wishes of the residents with the appellant’s qualified right to a licence.

60I have considered the concerns expressed by the objectors and am cognizant that I must not rely on speculation or unsupported concerns in reaching a conclusion. I may not make orders which rely on consideratons outside of the mandate of the Tribunal and must consider whether the objectors’ concerns are objectively supported by the evidence.

61I find on a balance of probabilities that there was insufficient evidence to support the objectors’ speculation, fears and concerns. I am not satisfied that the liquor licence in this case is not in the public interest having regard to the needs and wishes of the residents of the municipality in which the Premises are located.

CONDITIONS

62The added party asks the Tribunal to impose the following conditions if it determines that a licence should be issued:

1. That the licensee be required to post a prominent sign on the Premises that customers should be considerate of neighbours;

2. That the licensee be required to provide a telephone number for complaints and that someone be available to answer any calls while the establishment is open;

3. That the licensee be restricted to serving alcohol between 12:00 pm and 11:00 pm; and

4. That the licensee be required to notify the added party should it seek to modify the conditions of its licence.

63The Registrar says that conditions one and two are acceptable and supports the third condition however it does not support the fourth condition since that is a matter between the appellant and added party and there is already a provision in the LLCAct which deals with the removal or modification of conditions. The Registrar also says that the fourth condition is incapable of enforcement. With respect to the third condition, the Registrar says that, if it is in place then it should contain a restriction on the sale and service of alcohol and not just on the service of alcohol.

64The appellant argues that there should be no conditions attached to the licence. It says that conditions should be based on the reasonable concerns expressed by the objectors and that, in the event that the Tribunal finds that the objectors’ concerns are not objectively supported by the evidence, they cannot support conditions either.

65I agree with the appellant’s position. I have found that the objectors’ concerns were either outside the mandate of the Tribunal or not supported by the evidence presented at the hearing. In those circumstances, I decline to order that conditions be attached to the licence.

ORDER

66Having considered the evidence and submissions of the parties, I order the Registrar to issue a licence to the appellant, 7-Eleven Canada Inc. o/a 7 Eleven 72 Wharncliffe Road North, London, for the Premises without conditions.

Footnotes

1. 12018 CanLII 79631 (ON LAT) para. 27
2. 2Powerhouse Corporation v. Registrar of Alcohol, Gaming and Racing, 2021 ONSC 4116