Item - 2021.EX28.15

The Executive Committee:

1. Directed the Executive Director, Municipal Licensing and Standards and the Chief Planner and Executive Director, City Planning to report back in 2022 with final recommendations and proposed by-law amendments to modernize and clarify licensing and zoning regulations for restaurants, bars and entertainment venues, as well as recommendations related to the addressing impacts of problematic establishments.

2. Directed the Executive Director, Municipal Licensing and Standards and the Chief Planner and Executive Director, City Planning, in consultation with Economic Development and Culture and other divisions, as appropriate, to consult with relevant stakeholders and the public on proposed regulatory changes for restaurants, bars, and entertainment venues, and to include a summary of these consultation efforts in the final report in Part 1 above.

Current business licensing regimes and zoning regulations have not kept pace with the evolution of nighttime culture, and changing business models have blurred the lines between what is commonly taken to be a restaurant, bar, or entertainment venue. There is a need to modernize and clarify the rules to align with evolving business models, and provide flexibility and support for businesses, while ensuring an appropriate level of regulatory oversight to mitigate any potential community nuisance and public safety issues.

This report introduces a framework to update licensing and zoning regulations for restaurants, bars, and entertainment venues and provides information and next steps for upcoming consultations with stakeholders, the public, City Councillors, and partner divisions in early 2022.

The review of licensing and zoning regulations for restaurants, bars, and entertainment venues responds to a range of City Council directives related to modernizing business licensing and reducing regulatory burden on businesses, supporting public health and safety and addressing problematic establishments serving alcohol, and supporting Toronto's nighttime economy and live music venues. Notably, a 2017 report from the Auditor General also identified issues of regulatory uncertainty resulting in some eating establishments operating as unlicensed nightclubs.

Municipal Licensing and Standards (MLS) and City Planning staff began reviewing licensing and zoning regulations for restaurants, bars and entertainment venues in 2018. While this work was paused at the beginning of the COVID-19 pandemic as public health measures and provincial emergency orders limited operations of businesses in these industries, staff are restarting the review to modernize rules to support businesses, while balancing the need to address potential community nuisance and public safety issues. Economic recovery following the pandemic, and impacts on restaurants and local areas, including active main streets, is also a relevant consideration. Staff recognize that proposed regulatory amendments must be sensitive to the current context, challenges, and the new realities facing these industries during the pandemic, and in recovery.

Staff are considering a range of proposals to update licensing and zoning regulations to address identified issues, including moving towards a licensing approach based on complexity or extent of business activities to ensure there is appropriate and proportional regulatory oversight for businesses. Staff are proposing to modify licence classes to differentiate lower impact and higher impact establishments and determine licence conditions based factors such as venue capacity, liquor service, hours of operation, and entertainment uses. This approach will allow staff to review opportunities to provide more flexibility for businesses in terms of seating, floor plans, and entertainment.

Staff will also develop clear, distinct, and enforceable licensing definitions to differentiate licence classes, and ensure zoning and licensing definitions are harmonized and consistent for ease of interpretation. Staff will also explore modifying restrictions to indoor entertainment uses in eating establishments, and expanding nightclub permissions beyond the downtown area, as well as other proposals developed through further consultations.

Following further analysis and consultation as outlined in this report, staff plan to bring forward a final report with zoning and licensing recommendations and proposed by-law amendments later in 2022. This report will also include recommendations related to addressing select problematic establishments serving alcohol for Committee and Council consideration.

The Economic Development and Culture division (EDC) was notified of the development of this report.