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How Manitoba plans to join 21st century with new liquor-and-lotteries act

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Up until 2007, it was illegal in Manitoba to stand up in a bar and carry your drink to the washroom. Up until 1979, it was illegal to stand up in a bar with a drink at all.

Up until 1970, buying booze from a government outlet meant filling out a permit with your name and address. Up until 1960, indigenous Manitobans weren't allowed to buy booze from any source, government or otherwise.

Up until 1957, men and women in Manitoba could not share a drink in the same public place. And up until a 1921 vote to repeal prohibition, alcohol wasn't allowed in any public place at all.

Regulations governing the sale and consumption of alcohol have changed immensely during the 143 years since Manitoba became a province. The liquor laws of the past seem quaint, restrictive and even unconstitutional from the perspective of a culture that now expects beer, wine and liquor to be available anywhere we may want to enjoy it.

Over time, the consumption of booze in once-puritanical Manitoba has become more like the consumption of booze in Europe, where a wine bottle on the family dinner table has never been a sign of depravity and the sale of beer in the street somehow hasn't led to widespread anarchy.

In small dribs and drabs, regulations have changed to reflect public attitudes toward alcohol, a controlled substance now considered less deviant than tobacco. But Manitoba's liquor-licensing regime remains a creature of the past.

Owners of restaurants, clubs and hotels complain of a mess of confusing and contradictory regulations that make it difficult to simultaneously sell alcohol, make money and obey the law. Inspectors are forced to enforce the letter of a Liquor Control Act they privately describe as inflexible and out of step with the times.

And ordinary Manitobans who travel to other North American jurisdictions return home wondering why Winnipeg doesn't have the small clubs that liven up downtowns and pedestrian corridors in similarly sized cities.

The Liquor Control Act, however, is on the way out. The impending merger of the Manitoba Liquor Control Commission and the Manitoba Lotteries Corporation, announced as part the 2012 provincial budget, has created a window of opportunity to update the rules that govern booze.

By 2014, the province expects to have a new liquor-and-lotteries act in place that will eliminate some of the complaints about the current set of rules.

"We're taking an old, anachronistic act from the '50s and trying to move it into the modern age," said NDP cabinet member Dave Chomiak, the minister charged with administrating the gaming act and one of three MLAs overseeing the creation of a new Manitoba Liquor & Lotteries Corporation as well as a separate booze-and-gaming regulatory agency.

The new act is a bit of a Frankenstein monster. While provincial gambling legislation dates back to the 1990s, Manitoba's liquor legislation has its roots in the 1950s, the last time the province conducted a complete overhaul of alcohol regulation.

At the time, Manitoba was saddled with a set of regulations aimed at confining the consumption of liquor to places few people would actually want to drink. The reforms of the 1950s, which included innovations such as Sunday drinking on golf courses, came out of a review led by John Bracken, a pragmatic populist who spent 21 years as Manitoba's premier and another four as leader of the federal Progressive Conservative party.

The new review, underway since 2012, should result in a radical streamlining of Manitoba's liquor-licensing regime, Chomiak promised.

"The licences are going to be simplified. The licences are going to be more flexible and the vast majority of people who are involved in the (hospitality) industry are going to be very pleased," he said.

Right now, licence holders are not overly pleased. There are 12 different liquor-licence categories in the province, each with its own set of rules and annoyances.

For example, hotels may obtain a licence to sell alcohol in a "beverage room," but only if they also have a liquor licence for a "dining room," which must remain open when the beverage room is open. As well, hotels can only obtain a beverage-room licence if liquor authorities grant something called a hotel certificate, an official stamp of approval the Manitoba Hotel Association dislikes because it may apply to businesses that actually function as long-term rental-apartment blocks, as opposed to actual hotels where tourists and business travellers stay for a short period of time.

Restaurants, meanwhile, may also obtain a dining-room licence, but must ensure alcohol sales do not exceed 60 per cent of gross revenue. Restaurants may also obtain a "cocktail lounge" licence where customers do not have to purchase food, but the combined restaurant-lounge must still maintain the 40-60 food-to-alcohol ratio.

There's also a cabaret licence, which does not demand any food sales but does require licence holders to exhibit two hours of live entertainment every day. That entertainment must be visible from every room in the venue and must not involve recorded music.

As a result of these regulations, hotels that rent out space to pizza parlours in an effort to fulfil the dining-room requirement of their beverage-room licence have been hit with violations when the sole dining-room employee goes out to deliver a pizza.

Popular restaurants with lounges are forced to turn customers away simply to maintain food-to-alcohol ratios. And cabarets cannot satisfy the live-entertainment provisions of their licences by booking club DJs, many of whom are among the biggest draws in live music today. That's because of a literalistic interpretation of a cabaret-licence provision against recorded music, which was created to protect jobs for musicians in the age of jukeboxes.

"DJs should be accepted as entertainment because that's what people are paying to see. That dividing line has to go," said Stephen Hua, a managing partner in five Winnipeg cabarets -- Republic, Opera, Green Room, Fame and the yet-to-be-open Rec Room -- as well as one licensed restaurant, Deer + Almond.

"As business owners, we pay rent, we pay business tax and we have liquor licences, which have all these rules and restrictions," said Hua, who welcomes any update of provincial liquor-licensing regime. "Let us try to make money. Let us try to survive."

Over the years, licence holders have come up with novel ways to get around regulations. Winnipeg Mayor Sam Katz, who owned three nightclubs decades before he elected for public life, said it was difficult to maintain food-to-alcohol ratios.

"You were not a restaurant and it's no secret you really couldn't maintain the ratio. Nobody could. I don't think anybody did. So you gave away food and did what you did in order to try to live within the rules," Katz said in 2006, recalling his time as the proprietor of Norma Jean's, the Rolling Stone and the Bank. "People came there to dance, to meet people. They had a few drinks. They weren't coming there to eat. There's no secret about that."

Another survival strategy Winnipeg club owners employ is to try out a different licence as part an effort to reduce the red tape associated with holding a liquor licence. The King's Head, an Exchange District pub whose regular clientele includes senior city officials, abandoned a restaurant-and-lounge format for a private-club licence before finally settling on a cabaret licence.

The Toad In the Hole, an Osborne Village pub that has expanded six times in 23 years, also ditched restaurant and lounge licences in favour of a cabaret licence. But since it has more than one storey, liquor inspectors have asked the Toad to install closed-circuit TVs in order to satisfy the live-performance aspect of its cabaret licence.

"Every day, I have to put a band on TV so everyone can see and hear them," said Phil Kendrick, who manages the Toad In the Hole. "Right now, it sounds a bit crappy."

When cabaret owners offer to circulate a guitarist, accordion player or some other wandering minstrel around a level with no live stage, they are told those musicians must be miked up and broadcast, too.

"Even they say it's stupid," Kendrick said.

Hua, meanwhile, was forced to puzzle over which licence would best serve the Rec Room, his new Pembina Highway sports lounge, which will feature foosball, Ping-Pong and arcade games. "There's no licence for an entertainment hall that has Ping-Pong," he lamented.

The specificity of Manitoba's 12 separate licence categories has also proved frustrating for owners of businesses that have nothing to do with nightclubs. When wakeboarding and snow-sports park Adrenaline Adventures sought permission to host a licensed rock concert, the Headingley business was stymied by the fact it was ineligible for a "spectator activities" licence, which is intended for stadiums and theatres.

Adrenaline Adventures does have a licensed patio, but patrons are not allowed to leave it and sit alongside artificial lakes to watch wakeboarding. "We want people to be able to walk around our beautiful property and hang out by the dock," said owner Jason Rohs, who spoke at a public-consultation session about liquor-licensing reform. "But for now, we can't do that."

But perhaps they will soon. The regulatory review underway should radically reduce the number of licence categories in Manitoba.

"We're going to go from 12 to something like two, three or four. They're going to be broader categories and there's going to be flexibility," Chomiak pledged. "There will be smaller venues, that won't have to go through some of the hoops they go through now. And we will allow unique hospitality experiences."

Ontario made an even bolder move 15 years ago by moving toward only two licence categories -- one for alcohol sales and one for manufacturers. Canada's largest province went even further in 2011 by allowing any business to apply for an alcohol-sales licence. That resulted in applications from hair salons, spas and grocery stores, the Toronto Star reported.

Manitoba's reforms won't go that far. But the province will end the unintended war on DJs, Chomiak said.

"We're going to deal with that," he said, noting the province's goal is to ensure Winnipeg's music scene is no longer encumbered by over-regulation by the time the Juno Awards are held here again in 2014.

"Winnipeg is and should be the music capital of the country," he said. "We're trying to preserve that sense of nurturing (music), combining it with hospitality and fitting that into a larger framework of where we want to see the province going in terms of a friendly place where you can come, have fun and be entertained."

John Scoles, the proprietor of the Times Change(d) High & Lonesome Club, a Main Street roots-music venue, said he believes small venues will benefit the most from liquor-licensing reform.

"Small venues are the ones that struggle the most to meet licence requirements," said Scoles, who found the right formula for his own small venue in 2004 when he converted it into a private club from a restaurant and lounge.

"It never seemed success in this business was based on entrepreneurial ingenuity. It was based on what parameters you were forced to observe. Nobody could just have a great idea. They had to have a great idea that was shaped by something else."

But Manitoba isn't moving toward a free-for-all. For example, the new liquor-and-lotteries act will still require restaurants to maintain some form of food-to-alcohol sales ratio, Chomiak said.

There's a social benefit to serving meals with booze, he said. And more politically, the province isn't prepared to undermine entrepreneurs who've invested heavily in restaurant-lounge concepts such as Earls, Moxies and the Keg, which have proven extremely successful in recent years.

"We're not going to step all over people who've invested in infrastructure," said Chomiak, referring to independently owned restaurants as well as the chains.

In Manitoba, Earls-style venues have stolen the club-going clientele away from hotel beverage rooms, suggested Jim Baker, president and CEO of the Manitoba Hotel Association.

Decades ago, hoteliers opposed liquor-regulation reform in fear of losing market share to stand-alone venues. Today, hoteliers are more concerned about the prospect of legalizing alcohol-delivery services -- which would harm beer vendors -- than they are with the idea of more small clubs serving alcohol in downtown Winnipeg.

Baker said he would also like to see the province ease up on regulations governing minors in beverage rooms, especially in rural areas where banquets and fundraisers would present a business opportunity if people under 18 were allowed on-site.

"There's a need to see how these people can use the larger rooms for other purposes," said Baker, who cautiously supports the idea of regulatory reform. "We want to be part of this discussion."

Hotel, restaurant and club owners are also united in their desire to see liquor inspectors ease up on the enforcement of minor infractions such as improper paperwork. That sort of cultural change is coming as part of the creation of a new regulatory agency, Chomiak said.

Inspectors will be expected to ease up on red tape but get tougher on venues that serve minors or overserve adults, he said. Ending the "black-letter-law approach" to liquor enforcement will place it line with the current regulation of gaming, he added.

"What we're asking is how do we enhance consumer choice and options and balance that with a modern risk approach to responsibility?"

Manitobans should find out whether the province is successful at achieving such a balance by this time next year.

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 19, 2013 ??65535

History

Updated on Saturday, January 19, 2013 at 11:41 AM CST: adds fact box

January 28, 2013 at 2:29 PM: Corrects description of Adrenaline Adventures site.

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