Cost of Coffee Shop Licenses and Permits in Canada

You can tell that Canadians love their coffee because of the rampant increase in ‘coffee culture’ in the country. According to a study by madeinca.ca, coffee is more popular as a drink than tap water. It’s one of life’s great gifts and is perfect to bond over or get you out of your funk. On average, Canadians drink at least 2.8 cups of coffee every day, and that's a lot of demand for a simple caffeinated beverage. 

If opening up a coffee shop is on your bucket list so you can create a third space for people to meet, chat, and hang out, now’s a great time. But before you get a top-of-the-line espresso machine and a gorgeous glass display case full of delicious baked goods, you need to get your licenses and permits in order. Every license and permit has a different process of application. You’ll have to evaluate the prerequisites for getting the permit, the time it’d take to file, and eventually retrieve it so you can start your business. 

Your customers need to feel safe and know that you’re following all the regulations while serving them delectable coffee. 

What Coffee Shop Permits Do You Need to Open a Coffee Shop?

There are at least 10 coffee shop permits you need for your coffee shop business before you can actually start your operations. This includes everything from registering your business name to health permits. Here’s a concise list for you to start with:

1. Business license

You will most certainly be required to file for a business license before starting your coffee shop in Canada. 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

Instead of scouring through the endless scrolls of generic advice, start with your local city or county’s zoning website to get a quick guide to businesses like yours. A simple hack to find all the details would include searching for “Your Province/Territory + Business License Application”. 

How much does a business license cost?

Your coffee shop business template will need to elucidate all the expenses of 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. This includes the cost you would expend on both federal and provincial levels.

2. Registering an operating name

Depending on how you’re planning to run your coffee shop, you’ll need coffee shop licenses for your trading name or operating name. This will help you safeguard your property and stop people from plagiarizing your concepts.

How to get an operating name license

You start with picking out a name for your coffee shop. Remember to choose a name that’s unique and not already in use by another business in your jurisdiction. Consider conducting a domain name search or perusing business registry websites so you can confirm its availability. Once you’ve decided on a name, you need to register it with the appropriate government authority in your province or territory. You can easily find this information on the website of the provincial government or the business registration office.

How much does an operating name license cost?

The cost of your operating name license for the coffee shop depends on the province and territory of your business. It’s important that you clear all your dues before registering for the license.

3. Retail food service license

Food is going to be the second-most bought item at your coffee shop. This means, you’ll have to follow all the beverage and food codes by the concerned food & health department and follow all the additional provincial laws. In your coffee shop’s case, the end user of your product is going to be your customer. This means you’ll likely need a retail food service license as opposed to a wholesale food service license.

How to get a retail food service license

If you want to build confidence with your customers from the get-go, you need to have your retail food service license before you start serving coffee and other delicacies. There are a few regulatory bodies that you need to report to for your coffee business. This may include your province’s department of health or another local public health agency regulating the issuance of retail food service licenses. 

How much does it cost to get a retail food service license?

The fee for a food service license can vary by location and the type of service you want to offer but is generally around $250.

4. Goods and Services Tax/Harmonized Sales Tax

Before you get to pouring your lattes, you need to also figure out if you’re going to be selling any additional goods with your coffee. This includes merchandise, coffee beans, or other baked goods; you may need to register for a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) account. The GST/HST is a value-added tax on goods and services provided in Canada. 

How to register for GST/HST

All your GST/HST registration and remittance requirements for GST/HST depend on your business’s annual sales revenue. You can find all the details by consulting the Canada Revenue Agency (CRA) or a tax professional. 

How much does it cost to register for GST/HST?

The best part about the Goods and Services Tax/Harmonized Services Tax is that you can register for it for free in Canada. There is no fee charged by the CRA for registering for GST/HST. However, when it comes to other costs associated with meeting the tax obligations, you’ll get to know the details once you are registered.

5. Sign permit

Every great coffee shop needs signage directing consumers towards the entrance to your business. You’ll need open/close signs so the consumers can come and explore your establishment. They need to know if a business is providing service before they even step into it. However, before you start plastering the neighbourhood with flashing signs to show the way, 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. You also need to consider all the accessibility requirements to welcome all the customers.

How to get a sign permit

The easiest way to proceed with getting a sign permit is by checking your local city government’s website for sign permits and regulations. Depending on whether you’re a larger city or not, the permissions would change, too. 

How much does a sign permit cost?

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

6. Coffee shop insurance

Getting insurance doesn’t technically come under coffee shop licenses and permits, but it’s essential for every business that wants to avoid future financial or emergency burdens. This supports putting appropriate protection in case of any damage to the property or injury to the employees or patrons. In fact, provincial law often requires many types of insurance for coffee shop owners to carry.

Here are some of the coffee shop insurance policies you need to look into:

• General liability insurance: This is a must-have for every business, but especially if you have guests daily. General liability covers you as the owner if you, your employees, your coffee, or other food products accidentally cause harm to a patron. 

• Business property insurance: Takes care of the listed damages in the interior or exterior of your property.

• Workers’ compensation: If you plan on hiring employees to run your coffee shop, there’s a high likelihood that provincial law requires workers’ compensation insurance on your part to keep your employees protected.

• Commercial auto coverage: If your coffee shop is on wheels, you run a coffee shop truck, or you need a company automobile to transport goods, then you need commercial auto coverage. This safeguards your company vehicle in case of any accidents.

7. Food handler’s permit

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.

How to get a food handler’s permit

Generally, your local health authority or regulatory agency will issue the food handler’s permit. All the employees who need the food handler’s permit are expected to complete a safety training course.

How much does a food handler’s permit cost?

A food handler’s permit could cost around $100. Check your local requirements to find out the exact fee. 

8. Building health permit

While your employees need a health permit, so does the building of your establishment. Coffee shops need to comply with all the public and provincial regulations for sanitary conditions needed to serve food. This is done through regular inspection to get the lay of the land. This helps you in receiving the go-ahead needed for you to serve food and coffee to your customers.

How to get a building health permit

Search for “Your Province + Building Health Permit” to find out what your province requires when it comes to obtaining and holding a building health permit. 

How much does a building health permit cost?

Building health permit costs vary by location. However, they can run from $50 to $1000, so make sure you double-check your requirements to know what the cost will be upfront.

9. Liquor license

If you run one of those experimental coffee shops that also serves liquor, you’ll need an additional license for it. While most coffee shops serve cold brews and lattes, you can try and expand avenues by serving alcoholic beverages and cocktails. Check out Rosella Coffee & Wine Bar for tips to perfect the coffee shop by day, wine bar by night concept. 

How to get a liquor license

Serving alcohol comes with its own share of requirements. There are stringent rules on who you can serve alcohol and when. Different provinces and territories offer various license categories. This includes a restaurant license, lounge license, or catering license. The kind of coffee shop license and permits you need to determine which option best suits your coffee shop, depending on factors like the type of alcohol you plan to serve and your hours of operation. In order to put this into process, you can reach out to the provincial or territorial liquor control authority or commission responsible for issuing liquor licenses. This is where you’ll find all the necessary information, forms, and guidance on the application process.

How much does a liquor license cost?

Plan to invest at least a few hundred dollars in your coffee shop’s liquor license. 

10. Live entertainment license

Coffee shops with live music or a great sound system are now all the rage because of the ambiance they help in creating. Whether you plan to host a solo guitarist, a slam poetry event, or a spoken word artist, you’ll need a live entertainment license first.

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.

How much does a live entertainment license cost?

Depending on the kind of live entertainment you hire, your live entertainment license cost will change. Maybe you just want a solo guitarist, a small orchestra, or have a full-fledged event. This also includes whether you’ll have your live entertainment in the coffee shop or in the patio area.

Coffee Shop Licenses and Permit Laws in Canada

As stated above, you’ll have to get a range of licenses and permits to protect your business, employees, and customers within the provincial law. While this may be a time-consuming aspect of the business, it brings in more credibility and chances of funding and investments in the future. However, when it comes to federal regulations, there are only a few laws that you need to follow, as they aren’t regulated by any federal agency (beyond the CRA for taxes). 

The primary focus is on the quality and safety of the food and beverages you’re providing at your establishment. The primary licensing, permits, and inspections are done at a provincial and municipal level. It’s essential that you document all such permits and keep them handy in case of an emergency. After all, a compliant establishment is a credible one.

Unfortunately, when it comes to missing documents and permits for your local authorities, you cannot feign ignorance. Double and triple-check your local city governance websites for all the updated and detailed requirements. Additionally, remember to have all your policies, permits, and licenses up-to-date and in order to avoid heavy fines. It’s always recommended to get these permits regularly because you could end up losing your license otherwise.

Next Steps to Open a Coffee Shop

Once you’ve got all the necessary coffee shop licenses and permits in place, you can start setting up your coffee shop and refining the menu. This is when your coffee shop business plan will come in handy. Your next steps should be defined by your probable launch date and the current support you have. Even if you have all your coffee shop licenses and permits in place, you’ll still need expert help to execute your vision.

Getting your permits in place will surely put a dent in your coffee shop budget. But this is only to safeguard you from any future mishaps. However, if your business plan elaborates everything down to the ‘t’, you won’t have to worry about it at all in the future. 

And once all of this is done, you're ready to take on the coffee world. Just remember to plan before you invest and find people who help you lead strategically.

Related Resources

• Coffee Shop Equipment

• How Much Does it Cost to Open a Coffee Shop

• Coffee Shop Business Plan