Essential Bar Licenses and Permits Needed in Canada

The post-pandemic nature of bars and clubs in Canada has seen a quiet shift in what younger generations are consuming. They’re moving towards a quieter, more relaxing experience. While the sales of alcoholic beverages have declined by 1.6% to $25.8 billion with an increase in prices, the consumers have also started buying from more local breweries and wineries. So, if you’ve got to create a new-age bar and clubbing experience for your consumers, let’s understand what you’d need before jumping into the project.

Once you’ve done your market research, have a bar name, perfected your branding, and figured out a POS system, it’s the right time to get into the technicalities. Since you will be serving alcohol or alcoholic beverages, you need to get bar licenses and permits, too. This guide explores all the essential and additional bar permits you’d need.

What Permits and Licenses Do You Need to Open a Bar?

When you’re starting with creating a restaurant business plan, one of the first few things you’d need is bar permits and licenses. Here’s a quick rundown of how we can make opening a bar more strategic. Let’s understand exactly what we need to start.

1. Business license

It’s not a surprise that you need a business license to open a business in Canada. Since you’d be an establishment selling liquor or alcoholic drinks, your permits and licenses will need additional documentation. For example, in Ontario, you will need to apply for a Special Occasion Permit (SOP) from the Alcohol and Gaming Commission of Ontario (AGCO). However, the requirements for a business license may depend on the area of your business. This includes health and safety regulations, zoning bylaws, and other local requirements depending on the province, territory, and municipality where you plan to operate. 

How to get a business license

A simple way to do this is by looking up the details on your city or county’s zoning website. This should give you insight about the application process, the fee, the dates, and renewal status.

How much does a business license cost?

When creating your business plan, you will have to highlight all the costs you’re going to incur in your business. This includes the money you spend on getting licenses and permits. According to chirealestate.ca, you’d spend approximately $1,000 - $3,000 for yearly licensing and insurance, depending on your location. The amount may change depending on the kind of alcohol and food you’re serving, too.

2. Business number

In order to legally run your establishment in Canada, you need a Business Number (BN). A BN is essentially a tax number issued by the Canada Revenue Agency (CRA). This helps in identifying your business and filing taxes. The good news is that once issued, a BN never expires. In case of significant changes in your business, such as a change in ownership or closure and reopening, you’re advised to intimate the CRA for guidance on how to proceed and whether a new BN is required.

How to get a Business Number

There are two simple ways you can apply and receive a Business Number (BN). You can apply for it online via Business Registration Online (BRO). This is a rather quicker method, as you can get your BN quickly after application. If you’re taking the in-person route, some provinces have Service Canada Centres or CRA offices where you can apply. The processing time for these can vary. But you might receive your BN on the spot or within a short period.

How much does a Business Number cost?

It’s free of cost to get a Business Number (BN).

3. Use and occupancy permit

Whether you’ve leased your bar’s site or bought it, you’ll have to get it inspected by your local government to verify the safety of the consumers. After a successful inspection, you’ll be able to get a use and occupancy permit that lets you actually start your bar.

How to get a use and occupancy permit

Every local government body has a different way of approaching it depending on your establishment’s location. It is recommended that you visit the local government’s website for all the steps.

How much does it cost to get a use and occupancy permit?

The overall cost of the use and occupancy permit depends on where your bar is located, the overall square footage, and any exterior additions you’ve made. In major cities like Toronto, Vancouver, or Montreal, where regulatory requirements are often more stringent, Use and Occupancy Permit fees could be in the range of $2,000 to $5,000 or higher. In medium-sized cities, you might be looking at a range of $500 to $2,000 or more.

4. Liquor license

Alcohol is one of the most important things that would attract your consumers into the bar. In order to sell liquor legally, you’ll need the right bar permits and licenses. 

How to get a liquor license

Serving alcohol comes with its own share of requirements. There are strict rules on who you can serve alcohol. Generally, your province’s or territory's liquor control authority grants liquor licenses. This is where you’ll find all the necessary information, forms, and guidance on the application process. It’s essential that you start early so you can avoid the back and forth and stay true to your planned opening date.

How much does a liquor license cost?

Your liquor license could cost you anywhere between $100 and $900 depending on what you’re serving, where you’re located, and who’s the ruling authority in your area. Some provinces have flat fees, while others charge for annual renewal, lounge license, dining license, special events license, etc. Keep a check on your province’s websites for all the details.

5. Resale permit

As a bar owner, you’d prefer buying liquor in bulk so that you can plan your weekly menu around it. This also helps in keeping a track of your stock in case you have a big event at your establishment. A vendor permit or resellers’ permit enables your business to purchase wholesale products without paying sales tax. When you use these products to make items for resale (beverages or cocktails), the tax is passed on to the customer at the point of purchase. These taxes are then collected by you and submitted to your local province or territory either monthly or quarterly. 

How to get a resale permit

Getting a resale permit is a slightly tedious process, but once you’ve nailed it down, you’ll be able to charge your customers fairly. The first step in getting a resale permit is understanding what tax applies to your bar. In most provinces and territories, the two main types of sales taxes are the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). Some provinces have their own Provincial Sales Tax (PST) in addition to the federal GST. Therefore, it’s necessary that you have a Business Number. This serves as your unique identifier for tax purposes. You can apply for a GST/HST account online through the CRA's website using the Business Registration Online (BRO) service. Alternatively, you can also file Form RC1, Request for a Business Number, and mail it to the CRA.

How much does it cost to get a resale permit?

The cost of obtaining a GST/HST account (resellers’ permit) in Canada is generally free.

6. Signage permit

Your establishment’s signage is a key part of your branding. This is how your customers perceive you in real time. You’ll need open/close signs so the consumers can come and explore your establishment. They need to be aware of the kind of bar or restaurant you are before they even step in. But before you get a huge sign to showcase your brand, you’ll need to get a sign permit approved by your local city government. Every city has its own requirements when it comes to regulating the sign’s size, location, lighting, and visibility. If you rent your building, there may be additional rules about signage.

How to get a signage permit

Once you have the approval of your landlord, you can easily apply for a sign permit by checking your local city government’s website for sign permits and regulations. You should be able to find the right instructions, fees, and documentation needed.

How much does a signage permit cost?

Sign permit fees vary based on the sign’s size and your location. Expect to pay at least $50 or more.

7. Music license

Music is what sets the ambience at bars or any restaurant-like establishments. It sets the tone and atmosphere. Whether you’re playing music or hiring a DJ, ensure that you have all the right permits and licenses ready. Being negligent of this can land you in copyright trouble and brimming with fines. 

How to get a music license

Music licenses are normally obtained from performing rights organizations, such as the Society of Composers, Authors, and Music Publishers of Canada (SOCAN) or the Performing Right Society (PRS). Alternatively, you can obtain licensed music from a business streaming service.

How much does it cost to get a music license?

When getting a music license, you need to pay heed to how often you’re going to play the recording, which organization you choose for licensing, and what platform you’ll use to play. Performing rights organization fees normally start at $500 annually. 

8. Live entertainment license

Live entertainment is a great way to get customers through your door. As a bar, you can have karaoke time, game nights, or give space to indie bands to perform. If you’re opening a sports bar and plan on showing live games on the big screen, you’ll also need a commercial TV package, as these events are copyright protected. There are some copyrighted material exceptions depending on the size of your bar.

To understand the copyrighted material better, you can check out Sections 27 and 28 of the Copyright Act that outlines the rights and exceptions related to the reproduction and communication of copyrighted works. Additionally, Section 3(1)(f) establishes the exclusive right of copyright owners to perform a work in public, including through communication to the public by telecommunication.

In Canada, there is no specific regulation on how many TVs you can host in your sports bar per square foot. You will have to rely on the provincial or city laws in regard to the licensing or broadcasting of copyrighted material. 

How to get a live entertainment license

When you’re ready to get a live entertainment license, start with your county/city’s entertainment commission for regulations and the fees. If you’re thinking of simultaneously having music, you’ll have to get a separate music license in addition to the entertainment one.

How much does a live entertainment license cost?

When getting your live entertainment license, you’ll have to highlight your bar’s maximum capacity. It can be influenced by whether the events will be indoors or outdoors. Your bar’s maximum capacity can also be a factor. If your local municipality requires you to have a public hearing beforehand, this may cost extra.

9. Food service license

As an establishment serving food and liquor, you need to have your customers’ safety as your top priority. Every province and jurisdiction has specific rules and requirements for the food service license. In order for your employees to serve your patrons, they need the right qualification and certification. This permit showcases that they have all the necessary training to handle and serve the food safely. The need for licensing could also depend on whether you’re serving food made at the bar or if it’s prepackaged food. Check in with your local food regulatory body for all the details and fees.

How to get a food service license

Your local health authority or regulatory agency will issue the service license once they’ve conducted a thorough inspection of your outlet. While registering for the application, ensure that you’re providing them details like the name and address of your bar, in addition to the owner’s personal details. If a change of ownership or physical location occurs, you may need to renew your license. 

How much does a food service license cost?

Your food service license depends on the location of your establishment. But in case you’re unsure of the actual fee, you can inquire on your food regulatory agency’s website.

10. Food handler certification

If you’ve hired employees to serve and handle food and liquor at your establishment, they’re expected to undergo training and certification. This includes both the kitchen and bar staff. Food handler certification ensures that employees have received proper training in food safety and handling practices to prevent food-borne illnesses. There are a plethora of food and safety programs available that are certified by the provinces your bar is in. Once your employees get the food handler certificate, they can officially handle your patrons’ requests.

How to get a food handler certification

All you have to do is look up your province/territory + food handler certification programs, and you’ll find the right ones, including the application process and details.

How much does a food handler certification cost?

The cost for a basic food handler certification program can go up to $100. This typically includes the training course and examination fee. The exact price may vary by province.

11. Health inspection permit

As you’ll be serving beverages and food to customers, you’ll need a health inspection permit prior to that. This is to ensure that your business is compliant with all food, health, and safety codes. Generally, a health inspection permit is needed for new constructions, but this depends on your province or territory.

How to get a health inspection permit

You’ll need to put in a request for health inspection at your bar from your local health authority to get the permit. An Environmental Health Officer (EHO) or inspector will visit your bar to assess its compliance with food safety regulations, cleanliness, and overall safety. You’ll also have to provide information about your bar's ownership, location, menu, food safety plan, and other relevant details.

How much does a health inspection permit cost?

Fees can vary by location and the size and type of establishment. Application fees can range from approximately $100 to $500 or more, depending on the jurisdiction.

12. Seller’s permit

A seller’s permit is how you can collect and pay local and state taxes on taxable goods and services. These taxes include the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST), which are federal sales taxes. 

Bars in Canada also need to register for a GST/HST account with the Canada Revenue Agency (CRA) if they have annual taxable sales exceeding a certain threshold. In some provinces, there may be a requirement to register for a provincial sales tax (PST) or retail sales tax (RST) account if applicable.

How to get a seller’s permit

To understand whether your establishment is eligible for a seller’s permit or a sales tax license, you need to understand specific requirements as per your county. Don’t forget to reach out to the CRA for guidance and registration information. Check out any relevant provincial websites that talk about these permits and prerequisites. Only then can you apply for a PST or an RST.

How much does a seller’s permit cost?

Registering for a GST/HST account with the Canada Revenue Agency (CRA) is typically free. However, you will be responsible for collecting and remitting the applicable GST or HST on taxable sales. If your province has PST or RST, there may be additional costs associated with registering for a provincial sales tax account. These costs can vary by province and may include a registration fee.

13. Pool table license

If your plan is to start up a sports bar, a pool table would be a great addition to your establishment. It helps you engage with your customers in different ways. In some areas, a pool table license is required, which will determine the number of pool tables you have as well as the operating times. 

How to get a pool table license

You should look up your municipality/county + pool table license to see if you’re required to get one. On the basis of that, you can plan your next steps.

How much does a pool table license cost?

While planning your bar business plan, you’ll have to include the cost of getting the pool table and its license. Depending on where your bar is located, your license fees may vary. 

14. Fire department permit

Your consumers’ safety is the first & foremost thing you need to take care of when they’re at your establishment. Since liquor is a fire hazard, some provinces in Canada expect you to get a fire department permit before opening up a bar. This includes verifying safety procedures in the event of a fire, such as the number of fire extinguishers, unobstructed exits, and smoke detectors you need. The fire department will also notify you of the maximum number of patrons your bar can safely hold. 

How to get a fire department permit

You can simply contact your local fire department to help you through this process.

How much does a fire department permit cost?

The fire department permit costs depend on the city you’re in. This also includes how you’ll use fire in your establishment. For example, in Waterloo, you’re expected to pay $69.96 just for an open burning permit. There are other costs involved too, so it’s advisable that you check in with your fire department before you make a decision.

Licenses and Permits Across Canada

This article emphasizes the various kinds of licenses and permits you need to start a bar in Canada. While some of the processes may remain consistent across the board, you need to also integrate city/county-specific requirements in your application. For example, starting up a bar in Ontario comes with layers of provincial and municipal regulations. 

It's crucial to consult with relevant authorities, such as the AGCO, your local municipality, health & safety agencies, and industry associations, to understand and meet all the necessary requirements. You also need to ensure that your bar is accessible to individuals with disabilities in compliance with the Accessibility for Ontarians with Disabilities Act (AODA).

Your Next Steps for Opening a Bar

Licensing takes up a substantial chunk of money when it comes to starting a bar business. However, it’s essential to integrate that when you’re creating your bar business plan. Make sure you factor in these fees when working out your bar startup expenses, and plan well in advance to ensure you obtain everything needed in time for your launch. 

To understand the exact bar licenses and permits you need, it’s important to do diligent research beforehand, as legislation varies between provinces and municipalities, and deadlines always come up more quickly than expected.

Opening a bar is an exciting venture. Applying for a license surely feels exhausting as an entrepreneur trying to do it all. But it’s better to be on the right side of the law to avoid any fines and ramp up your overall cost.

Related Resources

• How to Open a Bar

• How to Write a Bar Business Plan

• How to Design a Bar in Canada