Chapter 12 Regulatory Requirements

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 2 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

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 3 Building Codes  The enforcement of provincial building codes is delegated to the municipalities for building permitsbuilding permits building inspectionsbuilding inspections occupancy permitsoccupancy permits

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 4 Fire Codes  There is provincial and territorial regulation and inspection of constructionconstruction access to exitsaccess to exits smoke alarmssmoke alarms fire extinguishersfire extinguishers

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 5 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

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 6 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

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 7 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. MusicMusic Art workArt work MoviesMovies BroadcastsBroadcasts Printed materialsPrinted materials

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 8 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

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 9 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.

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 10 Granting Bodies  These bodies are the creations of enabling legislation and are governed by the rules of administrative law: BoardsBoards TribunalsTribunals CommissionsCommissions

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 11 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.

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 12 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 applicationAn 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 criminalsNo criminal record on the part of the applicant but known links to criminals

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 13 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.

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 14 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 jurisdictionAn error of jurisdiction An error of law on the face of the recordAn error of law on the face of the record An error of natural justiceAn error of natural justice

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 15 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.

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 16 Liquor Licences  Provincially-regulated licences exist for mini bar licencesmini bar licences arena licencesarena licences special occasion licencesspecial occasion licences delivery licencesdelivery licences manufacturer licencesmanufacturer licences manufacturer’s agent licencesmanufacturer’s agent licences sales licencessales licences

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 17 Consumer Protection  Historically, caveat emptor applied  Now, consumer protection legislation protects the interests of the consumer: Goods must be fit for the stated purposeGoods must be fit for the stated purpose Goods must be of merchantable qualityGoods must be of merchantable quality

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 18 Competition Act  This is a federal statute giving the government broad investigative powers  It criminalizes such practices as price fixingprice fixing restraint of traderestraint of trade false or misleading advertisingfalse or misleading advertising predatory pricingpredatory pricing

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 19 Other Federal Laws  Consumer protection is further extended by the Hazardous Products Actthe Hazardous Products Act the Pest Control Products Actthe Pest Control Products Act the Explosives Actthe Explosives Act the Motor Vehicle Safety Actthe Motor Vehicle Safety Act the Food and Drugs Actthe Food and Drugs Act

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 20 Taxation  Residents of Canada are taxed on income earned inside and outside Canada.  Non-residents are taxed on Canadian income

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 21 Statutory Remittances for Employees  Employers must remit at source on behalf of employees federal and provincial or territorial income taxfederal and provincial or territorial income tax employment insurance premiumsemployment insurance premiums CPP or QPP contributionsCPP or QPP contributions

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 22 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.

Copyright © 2007 by Nelson, a division of Thomson Canada Limited 23 Directors’ Liability  Directors may be jointly and severally liable for the torts or other wrongs of a company, including liability for unpaid employee wagesunpaid employee wages unpaid taxesunpaid taxes