Chapter 12
Regulatory Requirements
Summary of Objectives
 To identify bylaws, codes and statutes
relevant to hospitality businesses
 To examine licensing procedures and
requirements
 To discuss consumer protection legislation
 To identify duties of hospitality industry
operators associated with the tax system
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Building Codes
 The enforcement of provincial building
codes is delegated to the municipalities
for
• building permits
• building inspections
• occupancy permits
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Fire Codes
 There is provincial and territorial
regulation and inspection of
• construction
• access to exits
• smoke alarms
• fire extinguishers
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Health and Food
Regulations
 Federal statutes include the Food and
Drug Act, the Meat Inspection Act,
and the Agricultural Products Act
 The Sale of Goods Act is the relevant
provincial and territorial statute
 Municipalities assist in enforcement
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Environmental Protection
 The Hazardous Products Act (federal) –
involves the handling and
transportation of hazardous or toxic
waste
 There is also provincial and territorial
legislation for the storage and disposal
of such material
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Intellectual Property
 The federal Copyright Act protects the
authors and creators of the following
subject areas and may require that user fee
payments be made to them.
• Music
• Art work
• Movies
• Broadcasts
• Printed materials
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Municipal Bylaws and
Zoning
 These laws govern residential and
commercial use of property
 They also govern business activities
such as hours of operation or number
of patrons permitted per square foot
 Public roads and parks are also
regulated by these laws
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Licences and Permits
 A licence is a government authorization to
do something. The licensee must achieve
at least minimum standards to be granted
the licence in the protection of the public
interest.
 A permit is also a government authorization
but is less involved with the meeting of
specific requirements than licensing.
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Granting Bodies
 These bodies are the creations of
enabling legislation and are governed
by the rules of administrative law:
• Boards
• Tribunals
• Commissions
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Public Notice of Licence
Applications
 The relevant board advertises the time
and place of a hearing on the
application in a local newspaper.
 This procedure gives the public an
opportunity for input into the board’s
decision.
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Grounds for Refusal
 An applicant’s technical qualifications are
examined by the board.
 The character of the applicant may or may
not be relevant to the application for a
licence. For example:
• An applicant’s criminal record for an offence
related to the area of the application
• No criminal record on the part of the applicant
but known links to criminals
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Public Interest
 An application for a licence may be
refused if it is in the public interest to
do so.
 Licences may also be suspended or
revoked based on legitimate
complaints or follow up inspections.
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Decisions and Appeals
 Usually an internal review of the decision
process is provided by boards
 An application for judicial review can be
based only upon the following grounds:
• An error of jurisdiction
• An error of law on the face of the record
• An error of natural justice
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Responsibilities of
Licensee
 An applicant usually qualifies for a licence
by meeting criteria and paying fees.
 Renewal of the licence should be carried out
prior to expiry.
 Transfer of a licence is not automatic and
therefore it should be made a condition of a
sale.
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Liquor Licences
 Provincially-regulated licences exist for
• mini bar licences
• arena licences
• special occasion licences
• delivery licences
• manufacturer licences
• manufacturer’s agent licences
• sales licences
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Consumer Protection
 Historically, caveat emptor applied
 Now, consumer protection legislation
protects the interests of the
consumer:
• Goods must be fit for the stated
purpose
• Goods must be of merchantable quality
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Competition Act
 This is a federal statute giving the
government broad investigative powers
 It criminalizes such practices as
• price fixing
• restraint of trade
• false or misleading advertising
• predatory pricing
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Other Federal Laws
 Consumer protection is further extended by
• the Hazardous Products Act
• the Pest Control Products Act
• the Explosives Act
• the Motor Vehicle Safety Act
• the Food and Drugs Act
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Taxation
 Residents of Canada are taxed on
income earned inside and outside
Canada.
 Non-residents are taxed on Canadian
income
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Statutory Remittances for
Employees
 Employers must remit at source on
behalf of employees
• federal and provincial or territorial
income tax
• employment insurance premiums
• CPP or QPP contributions
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GST and PST
 Goods and services tax must be paid by
suppliers engaged in commercial activity,
unless they are exempt.
 Provincial sales tax applies to retail activity
and the rates vary. Alberta does not levy
PST.
 Municipalities levy property taxes as well as
taxes on licensed businesses.
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Directors’ Liability
 Directors may be jointly and severally
liable for the torts or other wrongs of
a company, including liability for
• unpaid employee wages
• unpaid taxes
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