As 7-Eleven ekes out liquor licence approvals, Ford’s office rules out tearing up master agreement with the Beer Store
7-Eleven is winning its fight to sell booze in Ontario. Since February, the U.S.-based convenience store chain has been quietly piling up victories at the Licensing Appeal Tribunal, which has ordered the province’s alcohol regulator to issue liquor licences to seven of its stores.
In 2021, 7-Eleven applied to the Alcohol and Gaming Commission of Ontario (AGCO) for 61 liquor licences to serve alcohol in its Ontario stores — but not for takeout. The news resulted in public outcry from municipalities, opposition parties and the Ontario Public Service Employees’ Union (OPSEU), which represents LCBO workers.
The union filed multiple objections to the applications, saying convenience stores “can’t be trusted” to sell alcohol.
The AGCO opted to weigh the applications more carefully than it does for most wannabe-licensees “because of the public interest” in 7-Eleven’s plan. The regulator issued a “Notice of Proposal,” allowing the AGCO registrar to review or refuse the licences.
The company responded by appealing the NOP to the Licensing Appeal Tribunal, a body under Tribunals Ontario, and adjudicators have been slowly weighing each application.
Since March, the tribunal has ordered the AGCO to issue liquor licences to 7-Eleven locations in Brampton, Toronto, Sarnia and London. Hearings on at least one other location also concluded in June, but no decision has been issued.
Despite its wins, 7-Eleven has yet to be granted licences for any of those locations because it first plans to renovate the spaces. The company began rolling out Evolution Stores in the U.S. in 2020, which feature taquerias and alcoholic beverages on-tap, and hopes to expand the concept to Canada.
“Liquor licences are only issued after an AGCO inspection and the AGCO receives an Agency Letter of Approval from each of the local fire, building and health departments stating that the premises meets the current municipal standards or bylaws administered,” commission spokesperson Raymond Kahnert told Queen’s Park Today by email.
When the company informs AGCO its locations are ready, inspectors will be sent “to confirm the licence-holder has a clear understanding of their responsibilities.” The licence will be issued once that is completed.
Booze rules in flux, but Master Framework Agreement with the Beer Store isn’t going anywhere
The appeals come at a moment of flux in Ontario’s alcohol sales regime.
Convenience stores remain barred from selling alcohol, but the PCs made it legal for bars and restaurants to hawk booze alongside takeout and delivery orders. Originally a pandemic stop-gap, the measure was made permanent on January 1, 2021.
In the wake of these changes, bottle shops selling beer and wine have proliferated across Ontario. They often get around the province’s rules requiring a food order by including a small item, like a mini bag of chips, with each booze sale.
Even with its newly won liquor licences, 7-Eleven won’t be able to follow this same trend, as the government’s rulebook outlaws licensed premises located within “a convenience store, grocery store, department store or big box store” from taking advantage of to-go alcohol sales.
Queen’s Park Today visited one of the Toronto stores where 7-Eleven won its appeal, and found no evidence of construction on a forthcoming bar. Located near the intersection of Dundas Street West and Ossington Avenue, the convenience store is surrounded by dozens of existing drinking establishments.
It is also across the street from a natural wine shop that specializes in selling pricey bottles to-go.
Amid these checkered regulations, the PCs continue to face pressure to tear up the Master Framework Agreement with the Beer Store, which expires in 2025.
Doing so would likely lead to all convenience stores being cleared to sell beer, something Premier Doug Ford, a teetotaler, campaigned on doing in 2018.
The 10-year deal was inked by the former Liberal government in 2015. While the PCs passed a bill to quash it in 2019, they later backed off proclaiming the legislation because the Beer Store threatened the move could leave taxpayers on the hook for $1 billion in penalties.
Ford’s spokesperson Christine Wood told Queen’s Park Today the government has no intention of exiting the Master Framework Agreement early.
“We’re not considering tearing it up. That’s not the case,” Wood said by phone this week.
Kenny Shim, board chair for the Ontario Convenience Stores Association and president of the Ontario Korean Businessmen’s Association, recently told the Globe he spoke to Ford during this spring’s election campaign and was assured the right to sell beer was coming.
The province must give the Beer Store and its ownership companies two years notice if it doesn’t plan to renew the agreement, a deadline that lands in fall 2023.
Adjudicators side with 7-Eleven despite local pushback
A hearing about licensing another 7-Eleven location at 1181 Western Road in London was scheduled to be heard last Friday but was postponed due to conflict-of-interest concerns with the adjudicator, Geoff Pollock, who was appointed to the Licensing Appeal Tribunal by the PCs in February.
Pollock, a former Conservative Party of Canada candidate for Eglinton—Lawrence, was also appointed to the board of Western University by the PC government in 2021.
Because of its proximity to Western University and its residence buildings, the prospect of booze sales at this 7-Eleven location has faced heightened pushback, including from local NDP MPP Terence Kernaghan.
“Residents and nearby businesses have been clear that 7-Elevens should not be granted liquor licences that allow people to drink inside corner stores,” said Kernaghan on Twitter last week. “7-Eleven isn’t a restaurant, regardless of what they might argue, or what deal they might be trying to cook up with Doug Ford.”
Ford has been a vocal proponent of seeing 7-Eleven gain the ability to serve alcohol in-store, coming out publicly in favour of the idea in early 2021 after he surreptitiously met with the chief operating officer of the chain while on a trade mission to Texas.
“If you’re listening, 7-Eleven, I want you to expand,” Ford said in February 2021 when asked about the meeting. “I want you to create more jobs … we need you up here. Let’s start expanding, creating more jobs and opportunities for people.”
“Let’s see what the AGCO says about our friends at 7-Eleven,” he added.
Although Kernaghan, local city councillors such as Mariam Hamou, and the London and District Labour Council oppose giving the 7-Eleven near the university a liquor licence, such high-profile opposition has not prevented the company from winning appeals thus far.
Both the City of Brampton and the City of Toronto sent lawyers and witnesses to oppose, unsuccessfully, 7-Eleven’s appeals at hearings earlier this year. Brampton argued that issuing licences was not in the public interest because it was against the wishes of the municipality and residents, while Toronto argued on public policy grounds that it would harm the community in various ways.
(During a hearing in May, Toronto’s only witness, councillor Gord Perks, was denied qualification as an expert witness by the tribunal because the city forgot to give notice it intended to have him recognized as such. Under cross-examination, Perks also admitted he hadn’t reviewed 7-Eleven’s proposal “in great detail.”)
Hearings have revolved around the Liquor Licence and Control Act, which the PCs passed in 2019 as a replacement for the Liquor Licence Act. The law, which came into force last November, requires the AGCO registrar to issue a liquor licence as long as the applicant is in compliance with the act, but still leaves the door open to denying licences when they are “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.”
Despite this, the tribunal has consistently sided with 7-Eleven.
“I find that the added parties have failed to prove, on a balance of probabilities, that it is not in the public interest to grant the appellant a liquor licence,” ruled adjudicator Avril A. Farlam in a decision on one of the City of Toronto’s cases. “As a result, I have decided to direct the registrar to issue the licence in the circumstances.”
The tribunal has been open to imposing conditions suggested by opponents on the licences, such as a requirement that 7-Eleven locations only serve alcohol between noon and 11 p.m. and require signs telling people to be considerate of neighbours.
During a Brampton case in May, 7-Eleven adopted the noon to 11 p.m. restriction as its standard policy. The company also plans to have age verification to prevent underage people from buying alcohol at the stores, similar to its tobacco policies.
Two-to-four employees would be on hand at all times, security protocols would be adopted to prevent theft, and the store would work with neighbourhood restaurants to tamp down on public drunkenness if it becomes a problem.
“Given the evidence given on behalf of 7-Eleven, we are satisfied that 7-Eleven has a sufficient plan in place to properly and responsibly handle the sale of alcohol within its establishment,” said adjudicators Pollock and Kenneth Fishman in the ruling on Brampton’s case.
7-Eleven’s main office in the United States did not respond to a request for comment on this story.